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How does Sales Tax exemption work?

Sales tax is applied to orders according to the customer’s country and state or province, using our constantly updated tax logic. It's the same logic for invoices issued via our Invoicing Tool and orders made via the Paddle Checkout. 

If your customer has a valid VAT or Sales Tax number, this can be entered by you when creating the invoice when using our Invoicing Tool or by the customer when using our Paddle Checkout. The amount of tax is then revised accordingly and the customer.

If your customer has a Sales Tax exemption certificate, Paddle can issue a tax refund only after the order has been paid. To do so, the customer 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 after the order has been paid, though we are reviewing ways to streamline this process in the future.

Need more help?

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