Our Stripe tax integration allows you to instantly start monitoring all your global tax obligations, generate tax reports and collect tax on global payments within your app. This is an extremely useful tool when dealing with international customers who may be subject to different tax rates and regulations.
Enabling Stripe Tax
To enable Stripe tax on your account, navigate to Account > Payment Settings in the Movement Admin.
Under the Tax Settings heading:
Click the ‘I am required to charge Tax’ checkbox
Then click the purple ‘Setup Stripe Tax’ button
From here you’ll be taken into the Stripe dashboard.
Configuring tax settings in stripe:
Default Product Tax Category:
When setting up Stripe Tax, you'll need to specify the ‘Default product tax category’. This can be found in ‘Tax Settings’ under the ‘Product and prices’ heading. While we recommend using the ‘General - Electronically Supplied Services’ category, you have the flexibility to choose a different category if it better aligns with your specific offerings. If you require assistance in selecting the most suitable category, we recommended to reach out to Stripe directly for expert guidance.
You can learn more about product tax categories here.
Including Tax in Prices:
One of the important decisions you'll make during the configuration process is whether to include tax in the prices displayed to your customers. When enabling this option, Stripe Tax offers three options in the ‘Include tax in prices’ dropdown:
Yes - Tax is included in the price:
With this option, the tax amount is included to the listed price, and your members are charged the total amount, including tax, during checkout.
For example:
You have a Product listed at $100 AUD with an active GST registration in Australia (10% on all sales)
Your members will see $100 AUD at checkout and you will collect (in Stripe) $9.09 AUD as GST
No - Tax is is excluded from the price:
This option allows you to pass on the tax cost to your members. The listed price at checkout will include an additional tax component. So members pay the displayed price, plus tax.
For example:
You have a Product listed at $100 AUD with an active GST registration in Australia (10% on all sales)
Your members will see $110 AUD at checkout and you will collect (in Stripe) $10 AUD as GST
Automatic - Use currency to determine if tax is included or excluded:
Stripe will use the price currency to define whether the tax should be added on top of the price (excluded) or included in the price. Tax will be excluded in USD and CAD, but included in all other currencies.
What do my members see?
If the setting is set to “Exclude”, or “Automatic“- and Stripe deems it excluded, your members will be presented with the following for any location you have an active registration in:
First the member is presented with a tax estimate based on their approximate location:
Then when they click “Continue to Payment”, they are presented with an address form which accurately calculates tax relative to their actual location:
Checkout Stripe’s documentation on tax on prices to learn more.
Tax Monitoring:
Stripe will monitor the locations where you sell your products or services and notify you when you approach or exceed tax thresholds. This proactive monitoring helps ensure compliance with tax regulations and allows you to stay on top of your tax obligations.
The monitoring tab can be viewed by navigating to Tax > Monitoring, in the Stripe dashboard. This tool can help you understand where you might have to register, collect, and remit tax based on your sales into a state or country, even if you don’t have physical presence there.
Check out Stripe’s documentation on Tax Monitoring to learn more.
Tax Registrations:Tax registrations are essential to determine the specific locations where you must charge and collect taxes. It's important to note that tax charges will only be applied in locations where you have an active tax registration, locations where you are not registered for tax will just be monitored by Stripe. Therefore, if you are not yet registered for tax in a particular location, members from that location will not see tax charges during checkout, regardless of your settings.
In the Stripe dashboard, Navigate to Tax > Registrations, then click the ‘+ Add registration’ button to start the process. Stripe Tax supports 35+ markets, and you can find a list of state and country registration sites in the Stripe documentation.
Pricing:Stripe tax is priced at 0.5% per transaction where you’re registered to collect taxes. This means only sales in countries/ regions you’re registered in will incur this cost. Check out the Stripe tax pricing page for more information.
Further Resources:
Check out the two guides below for information on why you may be seeing the “This is legacy functionality..., and “Your Stripe Tax settings are incomplete” messages in the Tax Settings of the Movement Admin: