Understanding taxes and all their aspects is crucial for businesses operating across multiple regions, where varying regulations can significantly impact financial operations. Effective tax management goes beyond compliance with local laws. It also ensures accurate reporting, transparent pricing for customers, smooth operational workflows, and proper handling of chargebacks and refunds within the tax context.

Tax calculation events

Guide
Subscribe for events on your Solidgate account so your integration can automatically trigger actions. Webhooks notify merchants in real-time about their calculated taxes Webhook . The request body varies based on the transaction action and the location, being a US state or a non-US country. It also depends on whether tax was calculated and other factors. For instance, the webhook shows negative amounts if the transaction action is not a sale action like refund. The tax information may also be absent if the tax calculation fails due to reasons like a missing zip code. By delivering transaction amount, tax amount, tax type, and transaction context in tax details, this webhook gives businesses an efficient, automated way to manage taxes.

To start receiving these webhooks, you need to subscribe to the Calculated tax event.

Tax actions

For all action types except sale , chargeback_reversed , and rdr_reversed , the calculation amounts are negative.

Product tax categories

Solidgate tax solution categorizes products using product tax categories to apply the correct tax rates based on regional regulations. Tax rates can vary depending on the product segment. For instance, a software license may be taxed differently from a streaming subscription, with varying rates depending on the region. Using the correct category ensures compliance with local tax laws and helps prevent miscalculations.

Refer to the table below for available product tax categories. If a product does not fit a specific category, contact your account manager or the Solidgate support team. Solidgate is working on expanding the list of tax categories.

Tax reports

Solidgate offers comprehensive tax data exports to assist with compliance and financial analysis. These exports encompass transaction data, including:

• Order identifier
• Transaction and tax types
• Tax category and rate
• Country and more

There are the following types of data exports:

• Transactional tax
  This export provides detailed data on all transactions for a specific account over a period of up to one year. For example, when you download a file with transactions for the past month, its data can be broadly categorized into several groups:
  • transactions and order details such as its description, external PSP order identifier, product identifier, and processing time
  • business information, including channel details and legal entity
  • financial information, such as processing amounts, currencies, and payment categories
  • tax details, including type, category, rate, state, amount, location, and no-tax reason
  • geographical data like BIN country, IP country, geo country, IP address, and postal code
• Summary tax
  This export provides aggregated data from your account. Its structure and content may vary depending on the number of:
  • legal entities linked to your Solidgate account
  • tax details, including location, applicable rate, state, amount, and currency
  • financial details, such as processing currencies, taxable amounts, and tax amounts
  For example, suppose you have two legal entities linked to your Solidgate account and pay taxes in Austria, Belgium, and the UK. In that case, the exported data includes separate rows for each legal entity, country, and currency.

Handle chargeback and refund

Solidgate can handle various chargeback scenarios defined by multiple parameters such as type, status, amount, and currency. These rules can apply not only to chargebacks but also to other operations, such as refunds. Solidgate initiates corresponding events for platform partners in case of a refund or chargeback. Conditions include:

• Full amount in process
  If the chargeback is in process, Solidgate initiates a tax refund for the full amount of the chargeback.
• Full amount and documents submitted
  In this case, the event is ignored by Solidgate.
• Partial amount in process
  Solidgate issues a tax refund for the full initial payment amount and then generates a new tax for the remaining amount.
• Partial amount and documents submitted
  In this case, the event is ignored by Solidgate.
• Full refund/chargeback
  Solidgate generates a new tax transaction for the full initial payment amount.
• Resolved RDR chargeback
  Solidgate issues a tax refund for the full amount of the chargeback.
• Second chargeback
  Solidgate adjusts its calculations, modifies the tax refund, and generates a new tax transaction based on the Guide
  The chargeback entity signifies the start of the dispute process, containing the chargeback type and chargeback status. type and status of the second chargeback.