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My customers are charged with incorrect tax. Why?

Why am I observing different tax amounts on different subscriptions?


Summary


In Chargebee, for taxes to be applied, the customer's billing/shipping address should be present. For subscriptions where the country's information is not available, taxes won’t be applied. This leads to different pricing in your customer’s invoice.


For example, if you have configured Australia as a region (where you collect tax for sales) whose checkout prices are tax inclusive then, the price gets reduced to the customers who haven’t configured their billing/shipping address. Therefore, in such cases, you may observe a reduction in the subscription amount according to the AUD taxes.


To resolve this issue, make sure you update the country information for all customers so that the taxes are applied in the future. 

  1. To update the tax value for the existing current term invoices,

  • Remove the payments and void the invoice.

  • Update the billing/shipping country.

  • Now, use the regenerate option (this option will only be available for the current term invoices)


Note: An invoice can be regenerated only for the current term using the Chargebee interface/UI when the invoice is Voided or Deleted. See Regenerate Invoice.


  1. To update the tax value for the past invoices,

    • Remove the payments and void/delete the invoice.

    • Import the invoice

      1. Using bulk operations. (You can input the country details along with taxes while importing the invoice)

      2. Using Update invoice details API 


How to avoid incorrect tax details?


Tip: We recommend configuring the country field as mandatory so that the tax gets applied to the countries that you have configured. To set the country field as mandatory, Go to Settings > Configure Chargebee > Checkout & Self-Serve Portal > Fields tab > Billing/Shipping section > Country and configure the settings as shown below.




Related articles and Documentation

How to configure Inclusive or Exclusive taxes in Chargebee?

I want to shift from an exclusive tax to inclusive tax, is that possible?