Tax Rates
Tax Rates tells Threadline how much tax (such as VAT or GST) to charge on a subscription, depending on where the customer lives. Open it from Clients & Billing → Tax Rates.
The problem it solves
Many countries require businesses to charge tax on online services, and the rate depends on the customer's country, and sometimes their region or state. Adding that to every invoice by hand is slow and easy to get wrong.
Threadline applies the rates you enter. It does not know the law. Ask an accountant which taxes you must charge and at what rate.
How it works
- At checkout the customer gives their billing country (and region, tax ID and business name if they have them).
- Threadline looks for a matching rate. A rate with a region that matches wins over the country-wide rate. If nothing matches, no tax is charged.
- The discount (if any) is taken off the price first, then tax is worked out on what is left.
- The tax shows on the payment and on the invoice.
Added on top or already included
| Setting | Example for a 10.00 plan with 20% tax |
|---|---|
| Added on top (default) | The customer pays 12.00: 10.00 plus 2.00 tax. |
| Already included in the price | The customer pays 10.00, of which 1.67 is tax. |
All amounts are rounded to the currency's own number of decimals.
Add a tax rate
Click Add tax rate.
| Field | What to enter |
|---|---|
| Name | For example "Germany VAT". Shown on the invoice. |
| Country | The 2-letter country code, such as DE. |
| Region | Optional. Fill it in for a state or province rate. Leave empty for the whole country. |
| Rate % | From 0 to 100. |
| Already included in the price | Switch on for inclusive tax. |
| Enabled | Switch off to stop using the rate. |
Which gateways apply tax
- Stripe receives the tax natively on the checkout.
- The one-payment gateways are charged the total Threadline works out.
- PayPal bills the plan's fixed price, so tax rates do not apply there.
- Paddle handles tax itself as the seller of record.
The details the customer typed at checkout are saved, and you can see them on the client page under Contact and billing.
Common questions
No tax is charged. No enabled rate matches the customer's country, or they paid on PayPal.
The same country has two rates. Give the one that applies to everyone no region, and make the regional one more specific by filling in its region.