Tax Settings

Define a tax residence for a client

By default, the tax handling for all clients is based on the headquarter country defined in the contracting company. With the Tax Residence setting, you can override this default on a per-client basis, allowing you to apply the correct tax regulations for clients that operate in a different country than the headquarter.

The Tax Residence setting is optional. You only need to configure it when a client operates under different tax regulations than the contracting company's headquarter country. Changes to the Tax Residence take effect immediately and apply to all subsequent transactions for this client.

Set a tax residence for a client

1. Navigate to the Client you want to configure.

2. In the navigation bar, open Settings → Financial → Tax Rates and Delivery Thresholds.

3. Click on Tax Settings tab.

4. Click on Edit.

5. Select the relevant country from the dropdown.

6. Save your changes.

The selected country will now be used for all tax-related calculations for this client.

Define countries with tax exemption

The Tax Exemption Countries setting lets you define a list of countries in which a client is not required to charge tax on sales. Transactions to customers in these countries will be treated as tax-exempt. The price on the invoice will be the gross price defined in the price sheet with tax reporting 0 %.

Note

• Tax exemption settings are optional and only need to be configured when applicable to the client's specific tax situation.

• These settings do not replace the need for professional tax advice. Rules vary by country and may change. Always verify with a tax advisor which configuration applies to your client.

• Changes take effect immediately and apply to all subsequent transactions.

Why a Company May Be Tax-Exempt in a Country

There are several legitimate, legally recognized reasons why a company may not be required to charge tax in a country it sells to:

B2B Reverse Charge In B2B transactions, many countries shift the tax liability from the seller to the buyer. The seller does not charge tax; instead, the buyer self-reports the amount in their own tax return. This is the most common reason for tax exemption in cross-border B2B sales.

Double Taxation Treaties Countries enter into bilateral treaties to prevent the same income from being taxed twice. If a company has no permanent establishment (e.g., no office, warehouse, or subsidiary) in a country, a treaty may exempt it from that country's taxes entirely.

Product or Service Type Certain categories of products and services are exempt from tax in specific countries by law — for example, some financial services, healthcare products, or educational content. If what you sell falls into an exempt category in a given market, no tax should be charged there.

Export/Zero-Rating Goods and services exported to certain countries may be zero-rated — technically taxable, but at a 0% rate, meaning no tax is charged to the customer.

Verify with your tax advisor which configuration applies to you.

Set a tax exemption for a client

Configure Tax Exemption Countries when a client is legally not required to charge tax in specific markets — based on treaty obligations, reverse charge rules, product exemptions, or export regulations.

1. Navigate to the Client you want to configure.

2. In the navigation bar, open Settings → Financial → Tax Rates and Delivery Thresholds.

3. Click on Tax Settings tab.

4. Click on Edit.

5. Select the relevant country from the dropdown.

6. Save your changes.