Understanding the tax lifecycle

Staying tax-compliant worldwide is complex, but Quaderno will ease the burden on several steps of your workflows with digital taxes.

This article will help you understand your tax liability among the tax lifecycle phases and glue all the tax concepts from our glossary together.

1. Liability tracking

Depending on where you’re selling, your business or employees' physical presence, and how much you’re selling each year, your business would have the tax liability to register your business on the tax jurisdiction to start tax collection and tax filing there. A tax jurisdiction is an area subject to its own tax regulations.

The good news is that our turnover report will notify you whenever your business surpasses a tax registration threshold, which is any of these conditions that make your business liable for tax collection on a concrete tax jurisdiction.

2. Registration

When your business surpasses one of the tax thresholds or when it’s close to it, head to the tax authority to register your business and get your tax ID (or talk to your tax accountant).

Once you’ve registered your business on the different tax authorities, configure your registered jurisdictions on Quaderno and we’ll take care of everything.

3. Collection

Now that you registered your business, you can start the tax collection. You must apply the correct tax rate based on your product type and your customer’s location. You have different ways to calculate your tax rates with Quaderno.

Your business is also required to safely keep evidence of the location of your customers to justify the tax applied.

Quaderno will calculate the correct tax per sale for you and save the location evidence. We’ll warn you on the evidence report for those rare cases when there is any location evidence conflict and manual intervention is needed.

4. Billing

There are tax requirements too on how billing shall be managed.

Sequential numbering is compulsory for all invoices, receipts, credit notes, and expenses.

To be tax compliant, a tax breakdown must be included on each invoice, along with the business and customer data.

Quaderno offers many useful billing features:

• Automatically sending beautiful tax-compliant invoices that you can customize to your branding.
• Verify other businesses’ tax IDs from many countries, so that reverse charge is automatically applied when needed.
• Correcting invoices easily.
• Managing currencies and their exchange rate conversions.
• Billing dashboard for your customers and “pay now” buttons.

5. Reporting and filing

Finally, you have to file your business' taxes on each tax jurisdiction your business is registered in. Check the tax registration and filing guides on our blog to learn more.

Quaderno does not provide filing capabilities. However, we offer a whole range of reports that help simplifying it. Just invite your tax accountant to your Quaderno account, so that they can download your tax reports and file your business' taxes on the correspondent tax authorities.