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Turn on Automatic tax in Settings › Tax and Ledger asks Stripe Tax to calculate tax on every Checkout, subscription and invoice it creates. Stripe works out the rate from where the customer is. The setting is per environment: Sandbox and Live are turned on separately, and both start off.

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Set up Stripe Tax first

Stripe Tax is set up in your own Stripe account, in Settings › Tax. Ledger checks it and shows what’s missing: Ledger only lets you turn Automatic tax on once the first two are done. Products use your account’s default tax code unless you set one on the product in Stripe. For a SaaS product, set the default to Software as a service: txcd_10103001 for business use or txcd_10103000 for personal use. Credit packs and overage are usually taxed like the service they pay for, so they can use the same code.
Stripe calculates and collects the tax; you’re still responsible for it. Stripe’s threshold monitoring shows where your Stripe sales may require you to register, but you register before collecting, and file and pay the tax, yourself or through Stripe’s filing partners. Stripe charges $0 tax where you have no registration.
A Sandbox account that Ledger created for you has no Stripe Dashboard. To try Stripe Tax in Sandbox, connect your own Stripe sandbox key in Settings › Stripe.

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What gets taxed

Ledger never emails an invoice: every purchase is charged to the customer’s card, so a customer without an address is charged without tax rather than refused.

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Credits and amounts

  • Customers get a plan’s full credits whatever the tax. Ledger checks the plan’s line on the invoice at your price, before tax, and accepts the tax Stripe adds. This is true even if you turned on tax in Stripe directly, and for subscriptions with tax that you import from Stripe.
  • Discounts, coupons and customer balances are still not supported: an invoice with one grants no credits, and Ledger alerts.
  • Overage prices and the overage cap are before tax. A $50 cap bills at most $50 of overage, plus its tax.

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Turning it on or off

Turning Automatic tax on only changes new purchases. Subscriptions that started without tax keep renewing without it until the customer upgrades, or until you turn on tax for them in Stripe (Tax → Migrations in the Stripe Dashboard). Turning it off stops Ledger asking for tax on new purchases; subscriptions that already have tax keep it in Stripe until you turn it off there.