torpid anchorIf your clients, who are non-US individuals, are being charged tax, it could be due to the tax regulations applicable in your jurisdiction or the jurisdiction of your clients. Here are a few possible reasons why taxes might be applied:
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VAT/GST Regulations: Many countries have Value Added Tax (VAT) or Goods and Services Tax (GST) that applies to digital services or goods sold to consumers. If your business is registered in a country that requires VAT/GST to be collected on sales to individuals, this tax will be applied to your transactions.
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Reverse Charge Mechanism: In some cases, the reverse charge mechanism might apply, where the responsibility to pay the tax is shifted from the supplier to the customer. However, this typically applies to business-to-business transactions rather than business-to-consumer.
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Local Tax Laws: Depending on the country where your business is registered or where your clients are located, local tax laws may require the collection of certain taxes on sales.
To resolve this issue, you should:
- Review the tax settings in your Dodo Payments account to ensure they are configured correctly according to your business's tax obligations.
- Consult with a tax professional or advisor who can provide guidance based on your specific situation and ensure compliance with local tax laws.
- Reach out to Dodo Payments support for assistance in understanding how taxes are being applied to your transactions and if any adjustments are needed.
By understanding the tax obligations in your jurisdiction and configuring your payment settings accordingly, you can ensure that taxes are applied correctly to your transactions.