How to configure Inclusive or Exclusive taxes in Chargebee?

Problem Statement

You want to know how to configure inclusive or exclusive taxes in chargebee.

Solution

This article covers:

Price Types for taxes

Catalog price type

Region-based price Type

Price type regulations differ from country to country. Some countries, like the US, allow you to set your prices as inclusive or exclusive of tax as you see fit. Others, like New Zealand or Australia, require your invoices to display a price specifically inclusive or exclusive of taxes.

Chargebee offers the flexibility to configure different price types for taxes to help you charge the right type of tax based on the customer's region.

You can configure the pricing type at both the Currency and Country level.

The currency-based price type is used to indicate if the plan's price is inclusive or exclusive of tax. So if you create a plan with price $100 and the currency USD is set to "Inclusive" price type, Chargebee will consider that $100 to be inclusive of tax.

To configure this, navigate to Settings > Configure Chargebee > Taxes > Manage Catalog Price Types under Catalog Price Types on the right. You can configure different price types for each currency that you are selling.

The country-based price type determines if the tax break-up needs to be displayed as exclusive or inclusive on the invoice.

This can be configured on each region-based tax settings. Click on the country on the tax settings page and click on the 'Manage' option on the "Your checkout prices are" link as in the screenshot below.

This would be useful if some of the countries you are selling in have regulations that call for a particular price type**.**

For example, if Australia requires the price type to be exclusive and if the currency is set to inclusive for the AUD currency, Chargebee will carve the tax component from the plan and display the tax amount in an exclusive manner.

So if the plan price is $110 and the tax rate is 10%, the invoice would show the plan price to be $100 and a carved tax of $10 would be displayed. Here is a sample screenshot for your reference.