Tax in Meteroid is configured per Invoicing Entity, under Settings > Taxes. If you use several invoicing entities, configure each one separately by switching entity with the button in the upper right corner. There are three things to set up, in this order:

1. A method — how tax is calculated for this entity.
2. Tax categories — what you sell, classified for tax purposes.
3. Custom rates — the rates that apply to a category, by customer location.

Customer-level settings (tax status, VAT number, customer-specific rates) live on the Customer record and are covered in Managing customers.

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Tax calculation method

Under Settings > Taxes > Tax calculation, pick a Method:

• No tax — nothing is taxed. Custom rates and customer tax status are ignored entirely.
• Manual — custom rates only — there is no calculated VAT. Each line uses the customer’s own flat rate, or a matching custom rate; otherwise it is untaxed.
• Automatic EU VAT — Meteroid computes VAT by scenario (your domestic rate, reverse charge for intra-EU B2B, the customer’s country rate for intra-EU B2C, zero-rating for exports).

📌 Note: Automatic EU VAT is available to EU-based sellers only. Non-EU sellers use manual rates. Two more settings appear once the method is anything other than No tax:

• Default product tax category — used for invoice lines whose product has no tax category set.
• Require a valid tax ID for reverse charge — when on, reverse charge is applied only after the customer’s VAT number passes VIES. Until it does, the customer’s country standard rate applies. When off, a correctly formatted VAT number is enough.

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How tax is decided

The method is the gate. When it is No tax, nothing is taxed. Otherwise every invoice line is resolved in the order below, and the first match wins:

1. The customer is exempt or reverse-charged. The customer’s tax status wins first — a tax-exempt customer is untaxed, and intra-EU B2B reverse charge shifts the liability to them (validated by VIES when required).
2. The product’s tax category is Non-taxable. Lines whose category is Non-taxable carry no tax, whatever the method or custom rates say.
3. A custom rate matches the category and country. A custom rate targeting the line’s tax category, with a rule matching the customer’s destination country, applies to that line. Under Automatic EU VAT it replaces the calculated VAT; under Manual it sets the tax.
4. Otherwise, the method decides. Manual — the customer’s own flat rate applies, otherwise the line is untaxed. Automatic EU VAT — the engine computes the statutory rate for the scenario.

This ladder is also available in the app, behind the How is tax decided? link next to the Method selector. 📌 Note: Custom rates match against the customer’s destination address — their shipping address when they have one that differs from billing, their billing address otherwise.

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Tax categories

A tax category classifies what you sell, independently of any specific tax provider. Manage them under Settings > Taxes > Tax categories. Meteroid ships three built-in categories: You can add your own categories on top (for example Streaming services, or Training), optionally nested under a parent category. Built-in categories are marked Built-in in the table and cannot be deleted; your own show as Custom.

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Assigning a category to a product

Open Product Catalog > Products, select a product, and set Tax category in the detail panel. Leaving it on Entity default means the line falls back to the invoicing entity’s Default product tax category. If neither is set, the line is unclassified and the method alone decides its tax.

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Custom rates

Under Settings > Taxes, the section is called Custom rates under the Manual method and Overrides under Automatic EU VAT — same mechanism, different consequence:

• Under Manual, a custom rate defines the tax for a category, since there is no calculated VAT to replace.
• Under Automatic EU VAT, a custom rate replaces the VAT Meteroid calculated for that line.

Each rate has:

• Name — as it appears on the invoice, e.g. French VAT, US sales tax.
• Applies to — the tax category this rate targets. It then applies to every line whose resolved category matches, rather than being wired product by product.
• Rate by customer location — one or more rules, each with a customer country (or any country), an optional region, and a percentage. The most specific matching rule wins: region beats country, country beats a rule with neither.
• Accounting code — the reporting code carried onto the invoice’s tax breakdown, e.g. VAT_FR, SALES_US. It must be unique within your tenant.

📌 Note: Rules with no country act as an “everywhere” fallback for that category. If no rule matches the customer’s destination, the custom rate doesn’t apply and the line falls through to the method.

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Customer tax status

Set on each Customer record, under Customers > Tax information (see Managing customers). Tax status is one of:

• Taxable — normal taxation. This is the default.
• Exempt — no tax applies on any line.
• Reverse charge — the buyer accounts for the tax. This is an explicit choice, and it is additive to the intra-EU B2B reverse charge Meteroid already derives from the VAT number.

Selecting Exempt or Reverse charge reveals an Exemption reason field. This free-text legal mention is printed on the customer’s invoices and credit notes, and is legally required on EU exempt and reverse-charge documents. 📌 Note: Tax status is hidden when the Customer has customer-level Custom Taxes defined, because those rates take over the customer’s taxation entirely. Meteroid supports multiple cumulative rates per customer — TPS and TVQ in Canada, IGST, SGST and CGST in India — so complex regional structures can be reflected accurately.

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Automatic EU VAT in detail

When the method is Automatic EU VAT, Meteroid resolves the statutory scenario from the seller’s country, the customer’s country, and whether the customer is a business:

• A customer is treated as a business (B2B) when they carry a VAT number that passes format validation — and, if Require a valid tax ID for reverse charge is on, VIES validation as well. Without a VAT number, the customer is B2C.
• Domestic supplies take your own country’s rate.
• Intra-EU B2B supplies are reverse-charged.
• Intra-EU B2C supplies take the customer’s country rate, subject to the EU distance-selling threshold.
• Supplies outside your VAT territory are zero-rated as exports, and carry the corresponding legal mention.

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Legal tax mentions on documents

When a document carries no tax — because of reverse charge, an exemption, or a cross-border export — Meteroid prints the corresponding statutory mention automatically. You don’t configure these. The mention is selected from the seller’s tax jurisdiction and worded in the document’s language (see Invoice language). Examples of what is generated:

• Reverse charge — “VAT to be accounted for by the customer (Article 196 of Directive 2006/112/EC).”
• Export, B2B — for a French seller, “Article 259-1° of the French General Tax Code (CGI): supply of services to a taxable person established outside the European Union (Article 44 of Directive 2006/112/EC).”
• Export, B2C — a different provision is cited, because it is a different rule.
• Exemption — the headline plus the customer’s own Exemption reason.

Any EU seller gets EU VAT Directive wording. On top of that, a growing set of jurisdictions carry their own national statute citations and registration-number labels — MWST-Nr., UID-Nummer, NIF, CNPJ rather than a generic “VAT ID” — and those are used in preference to the directive wording wherever we support them. A seller outside the EU never receives EU directive wording. 📌 Note: We add national wording jurisdiction by jurisdiction. If you need a specific country’s statutory mentions and don’t see them on your documents, tell us at 👉 hey@meteroid.com — it’s a small, self-contained addition. Tax rows are labelled in the document’s language rather than the engine’s internal English label, so a German-language invoice shows USt. A jurisdiction whose own abbreviation differs overrides that from the seller’s side: a Swiss seller invoicing in German shows MWST. 📌 Note: Meteroid makes a document say the right thing. It is not a substitute for country-specific issuance requirements. For example, a Portuguese seller still needs AT-certified software with an ATCUD and QR code, and a Brazilian sale is still documented by an NF-e or NFS-e issued through the state or municipal system.

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VAT number validation

VAT numbers entered on a Customer are checked for format, then validated against VIES in the background. Results are re-checked periodically, and the evidence VIES returns (request date, registered name and address) is kept alongside the customer as an audit trail for reverse-charge decisions. A pending or unavailable VIES answer is not treated as a failure. Whether it blocks reverse charge depends on the Require a valid tax ID for reverse charge setting on the invoicing entity.