Chargify provides the ability to define taxes that are collected when a user subscribes to your product.
Taxes are defined on the site level and are available to all product families of the site. To apply a tax to a product or component, you first create the tax and then mark the product or component as taxable.
Creating a Tax
To create a new Tax, click on the Products tab at the top, and then click on the ‘Taxes’ button. From there, click the ‘Create New Tax’ button.
When defining a tax, there are two Tax Types to choose from:
General Tax (i.e. US Sales Tax, Canadian GST/PST/HST, Australian GST, etc.)
The General Tax allows you to apply a percentage rate tax on a specific geographic region. The region may be as broad as an entire country or as specific as a state/province. A typical use case for this type would be defining US Sales Tax for a specific state.
European Union – Value Added Tax
The EU VAT type works just like the General Tax, with a few distinctions:
- Tax Rules can only be defined on the country level, not state/province
- EU customers are given the ability to opt out of the tax on the hosted pages if they provide a valid VAT number (Note: only customers outside of your own country are allowed to opt out.)
In order to be as flexible as possible, Chargify provides the ability to define your own tax scenarios. Taxes are comprised of one or more ‘Tax Rules’. A Tax Rule specifies a geographic region and a percentage rate to be applied to that region. The geographic region can be either an entire country, or a specific state/province within that country.
Marking Products and Components as Taxable
Unless otherwise specified, all products and components are NOT eligible for taxes. Once a tax is defined, you will need to update your existing products and components so that they can be taxed. To do this, edit the product or component and check the ‘This product is subject to taxes’ checkbox.
You will also want to ensure that the “Require Shipping Address at signup?” checkbox is also checked for each product.
Coupons and Taxes
When applied in conjunction, taxes are applied to the total cost of the subscription AFTER the coupon adjustment has been accounted for.
You can view and export a history of all tax charges by clicking the ‘View Tax History’ button at the top of the Taxes page.