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Customer Tax Rates

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

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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

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Tax Settings

FieldDescriptionExample
CountryCustomer’s tax jurisdictionUS, DE, GB
Tax IDVAT number or Tax IDDE123456789
Tax ExemptExemption statustrue/false
Tax InclusivePrices include taxtrue/false

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Configure Tax Settings

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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

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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

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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.

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Tax ID Types

Alguna supports various tax ID formats:
TypeRegionFormatExample
EU VATEuropean UnionCountry code + numberDE123456789
UK VATUnited KingdomGB + 9 or 12 digitsGB123456789
US EINUnited States9 digits with hyphen12-3456789
AU ABNAustralia11 digits12345678901
CA GSTCanada9 digits + RT0001123456789RT0001
IN GSTIndia15 alphanumeric27AAPFU0939F1ZV

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Tax Exemptions

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Exemption Reasons

ReasonDescription
GovernmentGovernment entity
Non-profitNon-profit organization
ResellerReseller with certificate
ExportExport to non-taxable jurisdiction
Reverse ChargeB2B reverse charge applies
OtherCustom exemption reason

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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
Track certificate expiration dates and request renewals proactively to avoid tax being charged unexpectedly.

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EU VAT Handling

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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”

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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

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Best Practices

Validate Tax IDs

Always validate tax IDs before applying exemptions or reverse charge.

Track Expirations

Monitor certificate expiration dates and request renewals proactively.

Document Exemptions

Store exemption certificates and maintain an audit trail.

Test Calculations

Verify tax calculations with test invoices before going live.

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Troubleshooting

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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)

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Wrong Tax Rate

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

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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

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Next Steps

Customer Contacts

Manage customer contacts.

Customer Management

Learn about customer accounts.