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
Webhooks notify merchants about calculated taxes Webhook after each transaction change, such as an estimated tax for auth and calculated tax for settle, refund, PayPal dispute, RDR, and chargeback events.
This webhook provides businesses with an automated way to manage tax information by delivering key details: transaction amount, tax amount, tax type, and transaction context. However, 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 example, the webhook displays negative amount when the transaction action is refund rather than sale . Tax information may be missing if the calculation fails due to issues such as missing zip codes or incomplete address data.
To start receiving tax events, you can follow one of the options:
- subscribe to taxer.tax.calculated via the create webhook endpoint API
- add the Calculated tax endpoint via Solidgate Hub
- Go to Developers > Channels.
- Find the channel you need and click on it.
- In the Webhooks section, select +Add an endpoint.
- In the appeared form:
- Select Calculated tax from the dropdown list
- Specify URL
- Click on Add to save changes and start receiving the events.
Tax actions
| Value | Description |
|---|---|
| sale | A payment transaction indicating the successful purchase of goods or services. |
| refund | A return of funds to the customer following a request for a refund. |
| chargeback | A payment dispute initiated by the customer, resulting in the reversal of funds back to the customer. |
| rdr | A request for transaction details during a dispute, typically initiated by the acquirer or issuer. |
| chargeback_reversed | A previously issued chargeback has been successfully reversed, restoring funds to the merchant. |
| rdr_reversed | A previously initiated retrieval dispute request (RDR) has been reversed, concluding the dispute process without fund movement. |
| paypal_dispute | A dispute initiated via PayPal's resolution center, typically involving buyer-seller transaction disagreements. |
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 category ID | Tax category | Description |
|---|---|---|
| taxc_01JJVD830C789HBQVTVCWJ6AK2 | Infrastructure as a service (IaaS) - personal use | Cloud-based infrastructure services purchased for personal use. It includes access to virtual computing resources such as processing power, storage, and networking, intended for individual projects, personal software deployment, or non-commercial activities. |
| taxc_01JJVD830DS6VQT824YK6CV9C0 | Infrastructure as a service (IaaS) - business use | Cloud-based infrastructure services purchased by businesses for commercial use. It covers virtual computing resources such as processing power, storage, and networking, which are used to support business operations, software deployment, and enterprise workloads. |
| taxc_01JJVD830D0XPCQE3R5VFSE7ZZ | Platform as a Service (PaaS) - personal use | Cloud-based platform services purchased for personal use. It includes access to development environments, tools, and infrastructure that allow individuals to build, deploy, and manage applications without handling underlying hardware or operating systems. This category is intended for non-commercial projects and personal application development. |
| taxc_01JJVD830DZTYPXZ0FYJQ4A1N4 | Platform as a service (PaaS) - business use | Cloud-based platform services purchased by businesses for commercial use. It includes access to development environments, tools, and infrastructure that enable enterprises to build, deploy, and manage applications without managing underlying hardware or operating systems. |
| taxc_01JJVD830DX4RVVGF94BCZ695X | Software as a service (SaaS) - personal use | Cloud-based software services purchased for personal use. It includes access to software applications delivered over the internet without requiring installation or ownership of the underlying infrastructure. |
| taxc_01JJVD830D107RD1KSRYYXV9H8 | Software as a service (SaaS) - business use | Cloud-based software services purchased by businesses for commercial use. It includes access to software applications delivered over the internet without requiring installation or ownership of the underlying infrastructure. |
| taxc_01JJVD830DCSVY526GKFJCWRHJ | Software as a service (SaaS) - electronic download - personal use | Cloud-based software services purchased for personal use, where the software is electronically transferred to the customer. It includes applications that are downloaded or accessed over the internet without requiring physical media or customization for a specific consumer. |
| taxc_01JJVD830DTYF9FSKYDR65E7HB | Software as a service (SaaS) - electronic download - business use | Cloud-based software services purchased by businesses for commercial use, where the software is electronically transferred to the customer. It includes applications that are downloaded or accessed over the internet without requiring physical media or customization for a specific business. |
| taxc_01JJVD830EKTKTGDT57PEZQR6X | Electronically delivered audiobooks - personal use | Audiobooks that are delivered electronically for personal use. It includes digital recordings of books read aloud, whether prerecorded or live, that are transferred to the purchaser via electronic means rather than physical media. |
| taxc_01JJVD830EA2FDRTRCPNCT7833 | Electronically delivered audiobooks - business use | Audiobooks that are delivered electronically for business use. It includes digital recordings of books read aloud, whether prerecorded or live, that are transferred to the purchaser via electronic means rather than physical media. |
| taxc_01JJVD830D67G3TNPKKWGSDGZH | Electronically delivered books - personal use | Books that are delivered electronically for personal use. It includes digital versions of books, such as novels, encyclopedias, dictionaries, and manuals, and others that are transferred to the purchaser via electronic means rather than physical media. |
| taxc_01JJVD830DRK5EZKGXGHW0KX9Y | Electronically delivered books - business use | Books that are delivered electronically for business use. It includes digital versions of books, such as business directories, manuals, and reference materials, and others that are transferred to the purchaser via electronic means rather than physical media. |
| taxc_01JJVD830EBNNTEYXB7V7KT39J | Electronically delivered music - personal use | Sound recordings that are delivered electronically for personal use. It includes digital music files, spoken word recordings, ringtones, and other audio content that is transferred to the purchaser via electronic means rather than physical media. |
| taxc_01JJVD830EMGE1792BN61T31SC | Electronically delivered music - business use | Sound recordings that are delivered electronically for business use. It includes digital music files, spoken word recordings, ringtones, and other audio content that is transferred to the purchaser via electronic means rather than physical media. |
| taxc_01JJVD830EX1QXW2GFBX6K1P92 | Electronically delivered information services (personal in nature/personalized) - personal use | Electronically delivered information services that are personalized or individual in nature and intended for personal use. It includes specialized digital content that is tailored to the purchaser and not widely distributed in reports to others. This category covers information provided through electronic means rather than physical media. |
| taxc_01JJVD830EYP2BHMR3VTSXPXY1 | Electronically delivered information services (personal in nature/personalized) - business use | Electronically delivered information services that are personalized or individual in nature and intended for business use. It includes specialized digital content tailored to a specific business or organization and not widely incorporated into reports furnished to others. This category covers information provided through electronic means rather than physical media. |
| taxc_01JJVD830E67AESXXS76XF6WWD | Electronically delivered information services (general/non-personal) - personal use | Electronically delivered general information services intended for personal use. It includes digital content that is not personalized or tailored to an individual and may be widely available to multiple purchasers. This category excludes advertising and other information provided to media. The information is delivered electronically rather than through physical media. |
| taxc_01JJVD830ESC1CKGA9TGE8TKQ8 | Electronically delivered information services (general/non-personal) - business use | Electronically delivered general information services intended for business use. It includes digital content that is not personalized or tailored to a specific business and may be widely available to multiple purchasers. This category excludes advertising and other information provided to media. The information is delivered electronically rather than through physical media. |
| taxc_01JJVD830EJDWX88TQX12WV6T1 | Non-taxable | Goods or services that are not subject to VAT, sales tax, or other applicable taxes in any jurisdiction. It can be used to classify disbursements, exempt transactions, or specific items that remain tax-free regardless of local tax regulations. |
Via API You can apply tax categories to products using the create product API or update product API endpoints. To configure taxes with a tax category, specify the tax category ID.
Via Hub To apply a tax category to a product
- Go to Billing > Products.
- Find the product you need and click on it.
- In the Taxes section, select the tax category from the dropdown list.
- Click on Save changes.
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
| Legal entity | Country code | Country | Tax rate | Taxable amount | Tax amount | Currency |
|---|---|---|---|---|---|---|
| Legal entity 1 | AUT | Austria | 20% | 100.00 | 20.00 | EUR |
| Legal entity 1 | BEL | Belgium | 21% | 150.00 | 31.50 | EUR |
| Legal entity 1 | GBR | UK | 20% | 180.00 | 36.00 | GBP |
| Legal entity 2 | AUT | Austria | 20% | 120.00 | 24.00 | EUR |
| Legal entity 2 | GBR | UK | 20% | 200.00 | 40.00 | GBP |
- Make a request with the necessary parameters.
- Receive the report URL in the response.
- Download the report as a CSV file using the URL and authorization credentials.
It is crucial to use the same authorization credentials ( publicKey + secretKey ) to make the API request for downloading.
Since the report is prepared asynchronously, it may take some time before it is ready for download. If the report is not ready, the API reference returns the corresponding status code:
- 200 - authentication failed, check your Solidgate API access
- 204 - report not ready yet, wait a bit longer for it to generate
- 302 - redirect to a one-time S3 report download link
- 404 - report not found
- 410 - report unavailable or expired
Please note that the report is only available for 30 days from its generation date. After that period, it is no longer accessible. Via Hub To export the tax data
- Go to Reports&Exports.
- In the top-right corner, click on +Create report.
- In the pop-up window, add the required information:
- Select Transactional tax or Summary tax export type
- Specify a date range of up to one year
- Optionally, change the auto-created file name
- Click on Create.
Once confirmed, the exports are created for each selected channel. - Click on Download to save and view the file.
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 type and status of the second chargeback.