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How does sales tax and exemptions work with Invoicing?

Sales tax is applied to invoices according to the customer’s country and state or province, using our constantly updated tax logic. This works much like in the Paddle Checkout. 


When a valid VAT or Sales Tax number is entered for a customer, the amount of sales tax is then revised ahead of sending the invoice to the customer.


If a buyer has a sales tax exemption certificate, Paddle can issue a tax refund once the invoice has been paid. To do so, the buyer will have to send the tax exemption documentation to our buyer support team via assist@paddle.com. Our buyer support team will then review the documentation and issue the tax refund accordingly if the documentation is valid. This is currently only possible once the invoice has been paid, though we are reviewing ways to streamline this process in the future.

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