Situations where Quaderno does not apply taxes
There are several reasons why a transaction should not be taxed:
You are not registered in the relevant tax jurisdiction: Tax authorities require that every business must be registered before collecting taxes in their jurisdiction. If you aren’t registered, you legally cannot charge tax.
When do you need to register? Each jurisdiction has its own criteria, which can include having a physical presence in its territory or exceeding a certain sales threshold. Our Turnover report will notify you every time your business exceeds a sales threshold and might need to register in a new tax jurisdiction around the world.
- Exempt or zero-rated products: Some products may be tax exempt or have a 0% tax rate in certain jurisdictions. For example, in California, SaaS is considered a non-taxable service. Exempt or zero-rated products may vary by jurisdiction and change over time.
- Reverse charge: In some cross-border B2B transactions, the buyer may be responsible for remitting the tax directly to the authorities.
- Exempt customers: Some customers may be exempt from paying taxes in certain jurisdictions, such as non-profit organizations and government entities. In Quaderno you can specify whether a customer is exempt from paying taxes on their contact page.
- Exempt territories: Some jurisdictions contain administrative subdivisions or territories that are outside the scope of the country's tax system. For example, the Canary Islands in Spain or Saint Martin in France. In some cases, sales to these territories are tax exempt.