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Automatically collect tax on invoices

Learn how to automatically calculate tax on your invoices.

On an invoice, Stripe Tax calculates sales tax, VAT, and GST. To calculate these for each line item, Stripe uses:

  • Your tax settings
  • The customer’s tax settings and location
  • The product tax code and price tax behavior

Stripe calculates the tax at the published rate at the time of invoice finalization. For example, if you initialize an invoice draft on December 20 and set it to finalize on January 15, then January 1 introduces a new tax rate. Subsequently, Stripe calculates the invoice at the new rate.

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Set up the customer

We use the customer’s location to determine the relevant taxes to collect. Different countries have different setup requirements:

  • Customers outside of the US require at least a country-level address.
  • Customers in the US require a 5-digit postal code.
  • Customers in Canada require either the province or postal code.

You can add customer location information in the Customer details page by clicking Edit next to Details. To add a customer’s location from the Invoice Editor, click the overflow menu () next to the customer. Select Edit customer information, click Add additional details, and scroll down to Billing details.

After you update the location, click Update customer. Stripe applies the new location to all of your customer’s future invoices unless you update it. For more information, see Determine customer locations.

Set up line items

To calculate tax on each line item on an invoice, you need to set a tax behavior and optionally a tax code.

Customize tax settings for one-off line items

Customize line items in the Invoice Editor by selecting the tax behavior from the Include tax in price drop-down menu.

Customize tax settings for one-off line items

Customize tax settings for one-off line items

Customize tax settings for product-based line items

You can use both the Dashboard and the API to customize tax settings for product-based line items.

On the Products page, you can select both the tax behavior for a particular price and the optional tax code for the product. The tax behavior is per price. You can’t change the tax behavior after you select it, but you can create new prices or archive old ones. To set up a tax behavior, click Add a price (or Add another price if you already have one) and select it from the Tax behavior drop-down menu.

To set up a tax code, select it from the Tax code drop-down menu when you create a new product or edit the details of an existing one.

Customize tax settings for one-off line items

Customize tax settings for one-off line items

Enable automatic tax

Note

Log in or sign up for Stripe to enable Stripe Tax.

Enable the Use automatic tax collection toggle on the tax settings page to automatically enable tax calculation on new invoices you create in the Dashboard.

Stripe Dashboard with the automatic tax toggle set to true

Stripe Dashboard with the automatic tax toggle set to true

Update untaxed invoices

To enable automatic tax calculation for existing invoices:

  1. Click Edit invoice from the Invoice details page, or click the invoice’s overflow menu (), then Edit invoice from the Invoices page to create a new draft in the Invoice Editor.
  2. In the editor, turn on the Collect tax automatically toggle.
  3. If customer is missing address information required for tax calculation, a notification badge alerts you and provides instructions to resolve the problem.
    Invoice editor with the warning badge about missing customer address

    Invoice editor with the warning badge about missing customer address

  4. Save the invoice to enable automatic tax calculations on all future instances of the invoice. Learn more about editing invoices after finalization.

Update invoices with existing tax rates

To replace invoice tax rates with automatic tax calculation, follow the previous steps to edit the invoice. Then remove the applied tax rates and enable the Collect tax automatically toggle.

See also