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Tax Exemptions

Tax exemptions allow you to process orders and invoices without charging VAT/BTW for qualifying customers. This is essential for B2B transactions within the EU, exports, and dealings with non-profit organizations.

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Who Qualifies for Tax Exemption?

EU B2B Customers

Businesses in other EU countries with valid VAT numbers qualify for reverse charge (BTW Verlegd).

Export Customers

Customers outside the EU are exempt from Dutch/EU VAT on exports.

Non-Profit Organizations

Certain registered non-profits and charities may qualify for tax exemption.

Government Entities

Government organizations and public institutions may be exempt from VAT.

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Enabling Tax Exemption

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For Individual Customers

1

Open Customer Profile

Navigate to Customers in your dashboard and click on the customer you want to update.
2

Find Tax Settings

In the customer details panel, look for the Tax Exempt toggle in the business information section.
3

Enable Tax Exemption

Toggle the switch to enable tax exemption. The customer will now receive 0% tax on all future invoices and orders.
4

Add Documentation

Add a Private Note explaining why this customer is exempt (e.g., “EU VAT number verified: DE123456789”).
Tax exemption applies immediately. Any new invoices or orders for this customer will automatically have 0% tax.

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Using Bulk Actions

To update multiple customers at once:
  1. Go to Customers
  2. Check the boxes next to customers you want to update
  3. Click Bulk Actions button
  4. Select Toggle Tax Exempt
  5. Confirm the action
All selected customers will have their tax exemption status toggled.

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Visual Indicators

PayRequest makes it easy to identify tax-exempt customers:

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In Customer Lists

Tax-exempt customers display a badge:
  • Tax Exempt: Green badge indicating exemption is active
  • Standard Tax: Gray badge (or no badge) for regular customers

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On Customer Detail Pages

The customer profile shows:
  • Tax exemption toggle status
  • Country information (relevant for EU VAT rules)
  • VAT number if stored

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On Invoices

When creating invoices for tax-exempt customers:
  • All line items show 0% tax rate
  • Invoice displays “BTW VERLEGD” (Tax Reversed)
  • Total excludes tax automatically

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How Tax Exemption Affects Different Areas

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Shopping Cart & Checkout

When a tax-exempt customer shops in your store:
Without ExemptionWith Exemption
Product: €100.00Product: €100.00
BTW (21%): €21.00BTW (0%): €0.00
Total: €121.00Total: €100.00
The cart automatically detects the customer’s exemption status and adjusts calculations.

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Invoice Creation

When creating an invoice for a tax-exempt customer:
  1. System automatically sets tax rate to 0% for all items
  2. Invoice header/footer can show “BTW Verlegd” note
  3. No manual intervention needed

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Subscriptions

Existing subscriptions for a customer who becomes tax-exempt:
  • Future billing cycles will use 0% tax
  • Past invoices remain unchanged (for audit purposes)
  • Recurring amount stays the same (customer saves the tax portion)

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Orders

New orders placed by tax-exempt customers:
  • Order total calculated without tax
  • Order confirmation shows 0% tax breakdown
  • OrderItems stored with 0% tax rate

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VAT Number Storage

For EU B2B customers, store their VAT number for compliance:

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Adding VAT Information

  1. Open the customer profile
  2. Navigate to Business Information section
  3. Enter:
    • VAT Number: The customer’s EU VAT number (e.g., DE123456789)
    • Country: The customer’s country
    • Company Name: Legal business name
Always verify VAT numbers before applying tax exemption. Use the EU’s VIES VAT validation service to check validity.

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VAT Number Validation

PayRequest stores validation information:
  • vat_number_valid: Whether the number passed validation
  • vat_number_validated_at: When validation was performed
  • vat_company_name: Company name returned by validation
  • vat_company_address: Address returned by validation
Keep records of your VAT validations. Tax authorities may request proof that you verified customer VAT numbers before applying reverse charge.

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Reverse Charge (BTW Verlegd)

When selling to EU businesses with valid VAT numbers, the reverse charge mechanism applies:

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How It Works

  1. You sell to an EU business (not in your country)
  2. You verify their VAT number is valid
  3. You mark them as tax exempt in PayRequest
  4. You invoice them at 0% VAT
  5. Invoice shows “BTW Verlegd” or “Reverse Charge VAT”
  6. Customer accounts for VAT in their own country

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Requirements for Reverse Charge

To legally apply reverse charge, you must:
1

Verify VAT Number

Validate the customer’s EU VAT number through VIES or similar service.
2

Confirm Different Country

The customer must be in a different EU country than your business.
3

Document the B2B Nature

The transaction must be business-to-business, not B2C.
4

Include Required Invoice Text

Invoice must mention “Reverse Charge” or “BTW Verlegd” and show 0% VAT.

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Invoice Requirements

For reverse charge invoices, ensure your invoice shows:
  • Your VAT number
  • Customer’s VAT number
  • Text: “BTW verlegd” or “VAT reverse charge applies”
  • 0% VAT rate on all items

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Export Sales (Outside EU)

For customers outside the European Union:

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Automatic Detection

PayRequest recognizes non-EU countries and can apply 0% tax for exports.

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Manual Setup

  1. Set customer’s Country to their non-EU location
  2. Mark customer as Tax Exempt
  3. Add note: “Export - customer outside EU”

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Export Invoice Requirements

Your export invoices should include:
  • Clear indication this is an export sale
  • Customer’s full address (outside EU)
  • 0% VAT rate with explanation

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Best Practices

For each tax-exempt customer, record:
  • Why they qualify for exemption
  • Date exemption was verified
  • VAT number validation results (for EU businesses)
  • Any supporting documentation received
Use Private Notes on customer profiles to store this information.
VAT numbers can become invalid. Schedule periodic reviews:
  • Revalidate EU VAT numbers annually
  • Check if business customers are still operating
  • Verify non-profits maintain their exempt status
Ensure anyone creating invoices understands:
  • How to verify VAT numbers
  • When to apply tax exemption
  • What documentation to collect
  • How to handle edge cases
PayRequest maintains an activity log of changes. Keep your records up to date:
  • Note when exemption was enabled/disabled
  • Record reasons for changes
  • Store validation screenshots or exports from VIES

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Frequently Asked Questions

Tax exemption only applies to new invoices and orders. Past invoices are not automatically updated (this is correct for accounting purposes). If you need to correct a past invoice, you may need to issue a credit note and new invoice.
If you’re notified that a customer’s VAT number is no longer valid:
  1. Disable their tax exemption
  2. Contact the customer to verify their VAT status
  3. Re-enable only after confirming a valid number
  4. Document the change in their profile
Tax exemption is applied at the customer level, not product level. When a customer is tax exempt, all products they purchase are at 0% tax. If you need per-product rules, consider creating separate customer records or using different product variants.
If you toggle tax exemption for a customer with active subscriptions:
  • Enabling: Future billing cycles will be at 0% tax
  • Disabling: Future billing cycles will include tax at the product’s rate
The change takes effect on the next billing cycle.
While PayRequest handles the tax calculation, you should maintain proof of export (shipping documentation, delivery confirmations) for your records. Tax authorities may request this during audits.

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Compliance Checklist

Before applying tax exemption, verify:
1

Customer Qualification

Does the customer legally qualify for tax exemption?
2

Documentation

Do you have the required documentation (VAT number, export proof, etc.)?
3

Validation

Have you validated any VAT numbers through official channels?
4

Record Keeping

Have you recorded the exemption reason in the customer profile?

Tax & VAT Guide

Complete guide to tax configuration in PayRequest

Customer Profiles

Managing customer information and settings

Creating Invoices

How to create invoices with proper tax handling

Bulk Operations

Update multiple customers at once
Tax exemption rules are complex and vary by jurisdiction. This documentation covers PayRequest’s features. Consult with a tax professional for advice specific to your business situation.