> ## Documentation Index
> Fetch the complete documentation index at: https://alguna.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Customer Tax Rates

> Configure customer-specific tax settings and tax exemptions

# Customer Tax Rates

Alguna supports flexible tax configuration at the customer level. Set up tax IDs, apply exemptions, and configure tax-inclusive pricing.

***

## Overview

Customer tax settings determine how taxes are calculated and displayed on invoices. Each customer can have:

* **Tax ID/VAT number** for B2B transactions
* **Tax exemption status** for qualifying customers
* **Tax-inclusive pricing** preferences

<Frame>
  <img src="https://mintcdn.com/alguna-20/SHr1INYd9aYWbwbe/images/customers/customers-tax.png?fit=max&auto=format&n=SHr1INYd9aYWbwbe&q=85&s=9435172e0099f15aa655ff3bfaa1eadb" width="726" height="201" data-path="images/customers/customers-tax.png" />
</Frame>

***

## Tax Settings

| Field             | Description                 | Example          |
| ----------------- | --------------------------- | ---------------- |
| **Country**       | Customer's tax jurisdiction | `US`, `DE`, `GB` |
| **Tax ID**        | VAT number or Tax ID        | `DE123456789`    |
| **Tax Exempt**    | Exemption status            | `true/false`     |
| **Tax Inclusive** | Prices include tax          | `true/false`     |

***

## Configure Tax Settings

### Set Customer Tax ID

1. Navigate to **Customers → \[Customer Name] → Settings**
2. Scroll to **Tax Settings**
3. Enter the customer's Tax ID/VAT number
4. Select the applicable country
5. Click **Save**

### Mark as Tax Exempt

1. Navigate to customer's Tax Settings
2. Enable **Tax Exempt** toggle
3. Select exemption reason:
   * Government entity
   * Non-profit organization
   * Reseller certificate
   * Other (specify)
4. Upload exemption certificate if required
5. Click **Save**

### Set Tax-Inclusive Pricing

1. Navigate to customer's Tax Settings
2. Enable **Tax Inclusive** toggle
3. Click **Save**

When enabled, prices shown to this customer will include tax.

***

## Tax ID Types

Alguna supports various tax ID formats:

| Type   | Region         | Format                | Example           |
| ------ | -------------- | --------------------- | ----------------- |
| EU VAT | European Union | Country code + number | `DE123456789`     |
| UK VAT | United Kingdom | `GB` + 9 or 12 digits | `GB123456789`     |
| US EIN | United States  | 9 digits with hyphen  | `12-3456789`      |
| AU ABN | Australia      | 11 digits             | `12345678901`     |
| CA GST | Canada         | 9 digits + RT0001     | `123456789RT0001` |
| IN GST | India          | 15 alphanumeric       | `27AAPFU0939F1ZV` |

***

## Tax Exemptions

### Exemption Reasons

| Reason         | Description                        |
| -------------- | ---------------------------------- |
| Government     | Government entity                  |
| Non-profit     | Non-profit organization            |
| Reseller       | Reseller with certificate          |
| Export         | Export to non-taxable jurisdiction |
| Reverse Charge | B2B reverse charge applies         |
| Other          | Custom exemption reason            |

### Managing Certificates

1. Navigate to customer's Tax Settings
2. Click **Upload Certificate**
3. Upload the exemption certificate file
4. Set expiration date if applicable
5. Click **Save**

<Tip>
  Track certificate expiration dates and request renewals proactively to avoid tax being charged unexpectedly.
</Tip>

***

## EU VAT Handling

### Reverse Charge Mechanism

For B2B sales within the EU, Alguna automatically applies reverse charge when:

* Seller and buyer are in different EU countries
* Buyer has a valid VAT ID

The invoice will show zero tax with a note: "Reverse charge: Customer to account for VAT"

***

## Invoice Display

**Tax Exclusive (default):**

```
Subtotal:  $100.00
Tax (10%):  $10.00
Total:     $110.00
```

**Tax Inclusive:**

```
Subtotal (incl. tax): $110.00
Tax included:          $10.00
Total:                $110.00
```

***

## Best Practices

<CardGroup cols={2}>
  <Card title="Validate Tax IDs" icon="check">
    Always validate tax IDs before applying exemptions or reverse charge.
  </Card>

  <Card title="Track Expirations" icon="calendar">
    Monitor certificate expiration dates and request renewals proactively.
  </Card>

  <Card title="Document Exemptions" icon="file-lines">
    Store exemption certificates and maintain an audit trail.
  </Card>

  <Card title="Test Calculations" icon="flask">
    Verify tax calculations with test invoices before going live.
  </Card>
</CardGroup>

***

## Troubleshooting

### Tax Not Calculating

1. Verify customer has a billing address with country
2. Check tax provider is configured
3. Ensure product is taxable (not marked as exempt)

### Wrong Tax Rate

1. Review customer's tax settings
2. Check for customer-level rate overrides
3. Verify product tax category

### Reverse Charge Not Applying

1. Confirm both parties have valid EU VAT IDs
2. Verify seller and buyer are in different EU countries
3. Check VAT ID validation succeeded

***

## Next Steps

<CardGroup cols={2}>
  <Card title="Customer Contacts" icon="users" href="/customers/customer-contacts">
    Manage customer contacts.
  </Card>

  <Card title="Customer Management" icon="building" href="/customers/customer-management">
    Learn about customer accounts.
  </Card>
</CardGroup>