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Tax & VAT Guide

PayRequest provides comprehensive tax handling for businesses of all sizes. Whether you’re collecting Dutch BTW, EU VAT, or dealing with international tax exemptions, this guide covers everything you need to know.

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Overview

Automatic Calculations

PayRequest automatically calculates taxes based on your product settings, customer location, and tax exemption status.

EU VAT Compliant

Built-in support for EU VAT rules including reverse charge mechanisms for B2B transactions.

Flexible Display

Choose how prices are displayed to customers - with tax included or shown separately.

Customer Exemptions

Easy-to-manage tax exemption status for B2B customers and qualifying organizations.

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Setting Up Your Tax Configuration

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Step 1: Configure Business Tax Settings

Navigate to Settings > Tax & Currency to configure your business-wide tax defaults.
1

Enable VAT Registration

Toggle VAT Registered if your business is registered for VAT/BTW. This enables tax collection features across your account.
2

Set Default Tax Rate

Enter your default tax rate (e.g., 21% for Dutch BTW high rate). This rate will be applied to new products automatically.
3

Specify Tax Region

Select your business location (NL for Netherlands, or your EU country code). This affects how taxes are calculated for international customers.
4

Enter Your VAT Number

Add your official VAT/BTW registration number. This appears on invoices and enables VAT validation features.
Your default tax settings serve as templates for new products. You can always override these on individual products.

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Step 2: Configure Product Tax Settings

Each product can have its own tax configuration. Go to Products > Edit Product to adjust:
Tax Included (Recommended for B2C)When enabled, the price you set is the final price customers see. Tax is calculated backwards from this price.
  • Price set: €121.00
  • Tax rate: 21%
  • Net amount: €100.00
  • Tax amount: €21.00
Tax Excluded (Common for B2B)When disabled, the price you set is the net price. Tax is added on top.
  • Price set: €100.00
  • Tax rate: 21%
  • Tax amount: €21.00
  • Total: €121.00

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Step 3: Configure Shop Tax Display

Control how prices appear in your shop. Go to Settings > Shop and find the Tax Display setting:
Prices show the final amount including tax.Customer sees:
Best for: B2C businesses, consumer-facing shops

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Dutch BTW (VAT) Rates

PayRequest supports all Dutch BTW rates:
Always consult with your accountant to determine the correct tax rate for your products or services.

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Tax Exemptions for Customers

Some customers may qualify for tax exemption, such as:
  • B2B customers with valid EU VAT numbers
  • Non-profit organizations
  • Government entities
  • Export customers outside the EU

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Marking a Customer as Tax Exempt

1

Open Customer Profile

Navigate to Customers and select the customer you want to mark as exempt.
2

Enable Tax Exemption

In the customer details, toggle Tax Exempt to enabled.
3

Document the Reason

Add a note explaining why this customer is tax exempt (e.g., “Valid EU VAT number verified” or “Non-profit organization”).

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What Happens When a Customer is Tax Exempt?

When you create invoices or process orders for tax-exempt customers:
  • All tax rates are automatically set to 0%
  • Invoice line items show “BTW VERLEGD” (Tax Reversed)
  • The invoice total excludes tax
  • Cart and checkout calculations reflect zero tax
Tax exemption status is checked automatically at checkout. Exempt customers always see tax-free prices.

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Bulk Tax Exemption Updates

Need to update multiple customers at once? Use the Bulk Actions feature:
  1. Go to Customers
  2. Select multiple customers using checkboxes
  3. Click Bulk Actions
  4. Choose Toggle Tax Exempt

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EU VAT Rules

PayRequest implements standard EU VAT rules for cross-border transactions:

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B2C Sales (Business to Consumer)

*Note: For high-volume sellers, One-Stop-Shop (OSS) rules may apply.

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B2B Sales (Business to Business)

When selling B2B to customers in other EU countries who have a valid VAT number, the reverse charge mechanism applies:
  • You charge 0% VAT on the invoice
  • The invoice shows “BTW VERLEGD” or “VAT Reverse Charge”
  • The customer accounts for VAT in their own country
  • You must verify the customer’s VAT number is valid
To apply reverse charge in PayRequest:
  1. Mark the customer as Tax Exempt
  2. Store their EU VAT number in the customer profile
  3. Add a note confirming VAT number validation

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Supported EU Countries

PayRequest recognizes all 27 EU member states:

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Tax on Invoices

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How Tax Appears on Invoices

Your customers see a clear tax breakdown on every invoice:
For tax-exempt customers:

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Per-Line Tax Rates

Different products on the same invoice can have different tax rates:

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Setup Fees and Tax

Setup fees are taxed at the same rate as their parent product. If a product has:
  • Price: €50.00/month at 21% BTW
  • Setup fee: €100.00 (named “Borg” or “Installation Fee”)
The setup fee will also be taxed at 21%.
Setup fees with custom names (like “Borg” or “Onboarding Fee”) appear with their custom name on invoices, making it clear what the customer is paying for.

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Tax in the Shopping Cart

During checkout, customers see a complete tax breakdown. The cart displays:
  • Individual product prices
  • Setup fees (if applicable)
  • Custom field markups
  • Tax amount calculated
  • Total including tax

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Common Tax Scenarios

Setup:
  • Tax Rate: 21%
  • Tax Included: Yes
  • Customer: Not tax exempt
Result: Customer pays the displayed price, which includes 21% BTW.
Setup:
  • Tax Rate: 21%
  • Customer: Regular Dutch business (not exempt)
Result: Customer pays 21% BTW. They can reclaim this on their own VAT return.
Setup:
  • Customer: Marked as Tax Exempt
  • Customer’s EU VAT number recorded
Result: 0% VAT applied (reverse charge). Invoice shows “BTW VERLEGD”.
Setup:
  • Customer country: Outside EU (e.g., USA, UK)
  • Customer: Should be marked as Tax Exempt
Result: 0% VAT applied (export). No Dutch BTW on exports.
Setup:
  • Product Tax Rate: 9%
  • Examples: Books, food, medications
Result: 9% BTW applied instead of standard 21%.

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Best Practices

Verify VAT Numbers

Always validate EU VAT numbers before applying tax exemption. Use the VIES VAT validation service.

Document Exemptions

Keep records of why each customer is tax exempt. Add notes to customer profiles with validation dates.

Review Periodically

VAT numbers can become invalid. Review tax-exempt customers periodically to ensure continued compliance.

Consult Professionals

Tax laws are complex and change frequently. Work with an accountant familiar with Dutch and EU VAT regulations.

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Troubleshooting

Check these settings:
  1. Is your business marked as VAT Registered in Settings?
  2. Does the product have a tax rate set?
  3. Is the customer accidentally marked as Tax Exempt?
Possible causes:
  1. Product has a different tax rate than your default
  2. Customer has specific tax settings
  3. Country-based tax rules are being applied
Solution: Check the product’s individual tax settings and the customer’s tax exemption status.
Check:
  1. Is the Tax Exempt toggle actually enabled on the customer profile?
  2. Was the invoice/order created before the exemption was set?
  3. Clear any cached cart data and try again
Verify:
  1. Check if Tax Included is set correctly on the product
  2. Ensure the tax rate matches what you expect
  3. For existing invoices, you may need to edit and recalculate

Tax Exemptions

Detailed guide on managing customer tax exemptions

Invoice Tax Configuration

How tax is configured and displayed on invoices

Setup Fees

Configure one-time setup fees with custom names

Business Details

Configure your business information including VAT number
Tax regulations vary by country and situation. This documentation provides general guidance on PayRequest’s tax features. Always consult with a qualified tax professional for advice specific to your business.