TAX for rebilling
planned
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Ryan Kelley
We need the ability to apply tax (GST/VAT) to re-billing charges, both SMS/email and AI. Without this re-billing is unusable to anyone outside the US that wants to be compliant for tax.
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CFive Admin
🚨Hurry PLEASE - Been an issue for 2 YEARS!!🚨🚨
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Pablo Paredes
🚨 PLEASE - While you're on this... please also ability to change re-billing currency.
In some countries (like Mexico) stripe won't charge USD because cards are MXN.
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Babak Bavardi
Please make sure the rebilling also generates AN INVOICE. So businesses can use it for tax purposes.
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Sander Grane
The best approach for Norway would be to apply VAT when the customer adds funds to their wallet, not on rebilling charge
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Kevin Crossland
Hi Umar Ranginwala
In response to your questions
In the UK we need the ability tovset the VAT level to then be applied to all rebilking transactions
That VAT amount has to be paid by the client directly to us the Agency as it is our responsibility to submitt VAT returns wuth HMRC and pay any amounts payable. High Level can mot do this on our behalf
It would be useful for these (VAT) elements to cover other areas of the world as well Especially Europe although for me UK VAT is the primary concern
Just adding an amiunt into the rebilling price is bit a lawfull way of doing it
As ithers have said VAT needs to be a separate line item on the invoice/ receipt
Hapoy to discuss further if you require
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David Holland
My answer is UK VAT related.
Rebilling charges are a product, just like any other. Once calculated in the clients wallet, the agency make a charge and ADDS VAT in the same way as all products. The client gets an invoice for the rebilling sub-total with a VAT line item, and then a total. Their wallet in remitted that amount.
This enables the client to reclaim input VAT for HMRC and for the agency to pay output VAT to HMRC.
The existing mechanisms and invoices within GHL for handling VAT in the UK already do this for everything EXCEPT rebilling.
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Umar Ranginwala
Clarification on Tax Collection for Usage Charges
Before we proceed, I’d like to clarify a few points to ensure we fully understand the requirement:
1. Tax Collection Flow:
• Is the expectation that GHL collects taxes on usage charges from the sub-account’s wallet and then credits the tax amount to the agency’s wallet?
• Or is the expectation that GHL remits the collected taxes directly to the appropriate tax authorities on behalf of the agency?
2. VAT and Regional Tax Compliance:
• Are there specific VAT regulations in the UK that require GHL to handle tax collection differently?
• Do you need GHL to support custom tax configurations per region, or should this only apply to VAT in the UK?
3. Impact on Rebilling & Profitability:
• Are you currently absorbing the tax costs, leading to losses on re-billed usage charges?
• Would an option to automatically adjust rebilling rates to factor in taxes help resolve this issue?
4. Current Workarounds & Alternative Solutions:
• Have you explored manual tax adjustments on invoices?
• Would it help if we provided detailed tax reporting for reconciliation purposes?
I’d be happy to discuss this further on a call. Please use the link below to set up a time that works for you:
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Jamie Cureton
Umar Ranginwala
Thanks Umar, I can only share on my own experience for different businesses it might be different.
But at the minute I only serve UK businesses and as a VAT registered business we need to collect vat on our sales. Rebilling is classed as a sale so we need to add VAT.
At the minute I add VAY by incorporating a an extra 0.2 on top of the rebilling so that I get my markup and then collect enough for VAT so it doesn't affect my profit.
Which works from that perspective, but from the customers perspectice, they're paying VAT so they need a VAT receipt to be able to claim it back if they're a VAT registered business.
So I guess in answer to your questions...
- Yes collect the taxes and give it to us for us to give to the tax authorities.
- I'm not sure about this one because an accountant would be best to advise but if I end up with an overseas customer then the tax implications might be different.
- Adjusting rebilling rates to accomodate the VAT rate would be much better than just factoring it into the rebilling rate. But most importantly their receipt needs to be valid VAT receipt so VAT registered companies can offset it against their vat return.
- Haven't tried manual adjustments because that's a lot of work.
Hope this helps
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Ian S
Umar Ranginwala
I'll mimic Jamie Cureton in saying that (in the UK anyway) the rebill receipts need to show VAT (where applicable) so our clients can see there's VAT been added to their bill as they may be able to claim the VAT back.
The simplest solution (that I would love to see, as a business owner, not a VAT expert), is an integration with the likes of https://www.paddle.com as a SaaS payment processor / merchant of record. The features are a massive benefit as that alone would keep us 100% compliant as they,
- localise the VAT rates (know what country customers are in, and the rate of GST / VAT / TAX)
- they comply with all tax / GST / VAT rules and submit the VAT on our behalf (they are the merchant of record)
- they localise the currency (if we choose) so everyone can pay in their own currency
I'm not enough of an expert to know how to answer your questions correctly, only that all receipts / invoices (subscriptions as well as wallet rebilling) need to show VAT in the UK if the company is VAT registered. processor/merchant
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Jeff Kelly
Umar Ranginwala Here in Washington State, USA we have a sales tax. We are expected to collect and remit sales tax on various SAAS related services. I think for GHL what that means is that GHL would lookup the tax rate at the time of the transaction and charge the sales tax on the payment transaction and that amount would be placed in the agency level. We do not need or want GHL to remit the taxes for us. We do need a report available with line item tax location, amount charged, and amount to be paid to the state for whatever timeframe (start date, end date) we select so that we can verify our records and the GHL records line up for accounting purposes.
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Olivier Barbier
Umar Ranginwala here are useful info for tax in France perimeter, and I think could be applied elsewhere :
- there could be local VAT regulations with different %. It is true for FR. So yes we need to be able to setup the VAT % manually for eachsubaccount and for each kind of transaction
- YES about losses on re-billed usage charges : GHL must be able, based on previous line, to add tax when the payment intent is sent to Stripe. This way the customer is charged or not with VAT depending on regulations, and it appears on receipt. By the way, Please add this kind of transaction to the Transactions menu of the agency subaccount. For now we have only subscription visible.
- so YES the option to adjust rebilling rates to factor in taxes will definitly resolve the issue
- workaround : I call Stripe. Since auto-recharge are sent from GHL via payment intent, impossible to add tax directly in stripe. They said GHL must give the tax information/parameter in the request.
- tax reporting won't help : tax has to be added to the price when he pays. After it's too late, you cannot ask the customer to pay us just the tax amount after the transaction is done.
So to summarize :
- subscription : we can modify in Stripe and add specific tax, that's ok
- autorecharge/rebilling : GHL must provide a parameter at each subaccount level to specify how much tax to apply if necessary, and then apply this rate to the amount sent to stripe when the wallet is recharged.
- create invoice for these autorecharge/rebilling transactions in the agency subaccount invoice menu + show them in the transactions menu. For know it is just impossible to provide invoice to our customers, only receipt, and that is not compliant with regulation.
Thanks for your understanding.
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Hamish Nuttall
Umar Ranginwala I have some experience both in UK and New Zealand (where we charge GST - which is almost identical to VAT. Australia also charges GST. EU countries charge VAT
I am not an accountant.
If we step back for a minute to understand why we are asking this, it might be helpful.
It is a legal requirement for businesses in UK and New Zealand (and other places) to:
- charge VAT or GST on goods and services
- show the amount of tax as a separate line item - for b2b it is normally shown as:
service $X
Tax $Y
Total $Z
- use the words "Tax Invoice". incorporate the VAT or GST number on the invoice, and various other requirements.
GHL is sending out invoices in the name of our business which meet none of these legal requirements. This is putting us in breach of tax law which is a very serious matter.
I hope that is useful context.
Answering your questions directly
- collect tax and credit to us
- yes, see tax invoice requirements above
yes, tax rates are different in different countries - e.g. 20% in UK, 15% in NZ, 10% in Au. Also some countries need to be able to say GST, some need to say VAT. The only configuration is the % rate and the name of the tax
- yes. Adjusting rebilling rates does not meet the legal requirements set out above
- don't even know how manual adjustments would work - do you mean every month on subscriptions?
we don't need detailed reconciliation. Our accounting packages handle it
This actually isn't rocket science. Stripe handles this. The rules are pretty consistent across countries that charge VAT or GST. It is also serious
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Ryan Kelley
Umar Ranginwala . Tax Collection Flow:
• Is the expectation that GHL collects taxes on usage charges from the sub-account’s wallet and then credits the tax amount to the agency’s wallet?
Treat it as a product. Any re-billing must a a line items show the GST amount.
• Or is the expectation that GHL remits the collected taxes directly to the appropriate tax authorities on behalf of the agency? no
• Do you need GHL to support custom tax configurations per region, or should this only apply to VAT in the UK?
Australia GST
3. Impact on Rebilling & Profitability:
• Are you currently absorbing the tax costs, leading to losses on re-billed usage charges?
Can't use it at all, legally you must display GST on the invoice.
• Would an option to automatically adjust rebilling rates to factor in taxes help resolve this issue?
NO
4. Current Workarounds & Alternative Solutions:
• Have you explored manual tax adjustments on invoices?
Yes, but doesn't work for re-billing as the invoice is automatically issued
• Would it help if we provided detailed tax reporting for reconciliation purposes?
Not really, just display GST on the re-billing invoices for the client
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Umar Ranginwala
Ian S
Can you please set up a call on my calendar to discuss this further
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Ian S
Umar Ranginwala I have checked that link and there are no available time slots in your calendar. Please let me know when you've opened up some spaces and i'll book in with you
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GERALD EDER
Umar Ranginwala There are no free time slots on this calendar
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Monsieur le proprietaire
Umar Ranginwala Same in Canada, we have regional taxe and country tax. I must comply with taxing rules to charge taxes on any invoice or product I sell.
Therefore 10$ added to a wallet is 10$ + tx. I will remit the taxes myself to the authorities and need a detailed tax report to do so .
Right now, I absorb the lost (+-15%) and my accountant is pissed because i am not compliant. Only solution I have is to create a plan with unlimited rebilling which is a HUUGGEE risk or stop charging for rebilling
Manual tax is not a possibility, way too long to manage
I just need to be able to charge taxes same as when I sell a physical product in the subaccount invoice tab
ALSO: taxes report only shows all level of taxes altogether in the colomn "Line Item Tax". We need to be able to show all level of taxes distinctively because money for province and for federal tax are not sent to the same place!
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Jonas Carlstrom *
Umar Ranginwala any update on this? 🙏🏻
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Ian S
Umar Ranginwala I have been able to find a time next week to speak with you about this. as this integration (or something like it) would be amazing to keep us compliant in every country
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Jack Wiggins
Umar Ranginwala thank you for your response!
Although I am happy to hear back from HighLevel on this matter. However, it does baffle me a company that has secured over $100m funding from investors is asking their customers about how to implement a tax-related item into their software. This is not complicated.
Currently I am absorbing VAT costs on all re-billing usage charges. This is the same for any UK based company right now.
We need the ability to ADD ON 20% VAT to all rebilling to be compliant. This can be in the form of "included" or "excluded". Most companies in the UK dealing in the B2B world (which I assume is most GHL users) would prefer VAT to be added on as an extra.
For example, say my client rebilling total was $100. Well I would need to automatically invoice my client $120. The $100 for rebill + $20 for 20% UK VAT. I would like to show these amounts on the invoice too.
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Olivier Barbier
At the same time, to be able to change the currency of a plan on the fly would be a great improvement too !
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Olivier Barbier
Yes it's a must have to be compliant, especially in Europe. Please add this feature as soon as possible
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Jason Gray
15th of May 2023 this post was made - This is single handedly the worst part of High Level.
It's nothing but a time and money drain on businesses.
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