What is Default Sales Tax in Xero integrations?
Problem Statement
You want to understand what Default Sales Tax is in the Xero integration and how to configure tax mapping for your Xero region.
Solution
Xero uses default tax rates for VAT liability reporting. Chargebee calculates tax from the billing/shipping country. When no country is available for tax calculation, Chargebee uses the Default Sales tax from your Xero tax mapping. If billing/shipping country is missing, Chargebee uses the default sales tax from the Xero integration tax mapping.
Steps to Set It Up
(Only if taxes are enabled on your Chargebee site.) Chargebee shows default and custom tax rates from your Xero account. Map a tax rate for each category and region in the integration.
US edition (International): Chargebee creates tax rates in Xero automatically.
Canada, India, New Zealand, Australia, Singapore, or South Africa: Select from your Xero tax rates for:
| Category | Select a tax rate from Xero |
|---|---|
| Sales | Select a tax rate to map all your taxable sales, for instance, New Zealand - 15% GST. |
| Exempt | Select a tax rate to map exempt sales (either the Customer is exempt or the Product is exempt). |
| Export | Select a tax rate to map sales to any other country outside taxable regions. |
UK edition: Xero creates default rates for VAT reporting. Select from those when configuring. For MOSS registered (digital subscriptions in the EU), map Sales, Exempt Sales, and Export Sales. You can use the MOSS Reporting feature in Xero for returns. For Non-MOSS, map Sales, Exempt Sales, Export Sales, Reverse Charges (zero-rated for B2B with VAT number), and Sales to outside EU as needed. See Xero’s guidance for Sales to outside EU.
Global Xero: Apply the same tax mapping logic per country as needed.
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