Managing tax rate changes

Modified on: Tue, 6 Oct, 2020 at 10:10 AM

This article covers 

Will the new tax rate immediately apply to all the existing customers

How does the tax rate apply to a customer who finishes his trial

How to make the new tax rate apply to both the new and the existing customers


Summary


In Chargebee, taxes are applied whenever an invoice is generated for either a subscription, renewal or a one-time charge.


Note: Taxes will be applied to invoices only if you have configured the taxes in Chargebee. Ensure you configure taxes for every region you have customers in. Click here, to know more on taxes.


What happens when you make changes to tax rates?


Once you make changes to the tax rate, the new tax rate will be applied on the next invoice which gets generated for all the existing customers.


How will the tax get applied to a customer’s subscription that is in the trial?


When a subscription is in trial, no invoice is generated. Therefore, when the customer’s subscription completes the trial and moves to the Active status, the invoice will be generated with the current tax rate that is updated on Chargebee.

How to handle temporary tax rates?

If you are experiencing a change in tax rates due to the pandemic and would want to change the rates frequently over time, configure separate tax profiles with the price change so that you can switch between the tax rates whenever necessary.

Info: Tax Profiles are available from the Scale Plan and above.
Note: Make sure you test this scenario in your Test site before implementing it in the Live site.

Related articles and Documentation

How to make the VAT rate change immediately?
I want to shift from an exclusive tax to inclusive tax, is that possible?

K
Kirthiga is the author of this solution article.

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