If you need to charge sales tax, VAT, or GST on subscriptions, you can enable automatic tax collection so Stripe handles the calculation for you.
There are two parts to the setup: first configure Stripe Tax in your Stripe Dashboard, then turn on the `Enable Stripe Tax` toggle in the platform.
Part 1: Set up Stripe Tax in your Stripe Dashboard
Log into your Stripe account at `dashboard.stripe.com`, open the `More +` menu in the left sidebar, and click `Tax`.
Click `Get started`, enter your business address, and then add the tax registrations for the states or countries where you are actually registered to collect tax.
For example, add California if you are registered there for sales tax, or add the relevant EU country and VAT number if you are registered there for VAT. Only add places where you are genuinely registered.
- Log into Stripe
- In the left sidebar, click `More +`, then click `Tax`
- Click `Get started`
- Enter your business address
- Add your tax registrations
- Save the registrations to activate Stripe Tax on the account
Stripe Tax is a paid Stripe feature, so Stripe charges a small fee on transactions where tax is calculated. Check Stripe pricing for current costs.
Part 2: Turn on tax collection in your platform
Once Stripe Tax is configured in Stripe, switch back to the platform and enable the platform-side toggle.
- Make sure you are in `Agency mode` using the mode switcher at the top of the left sidebar
- In the left sidebar, under the `Business` section, expand `Billing & Revenue`
- Click `Connect Stripe`
- Find the `Enable Stripe Tax` toggle with the description `Automatically calculate and collect sales tax`
- Turn it on
How it works for your customers
Once Stripe Tax is active in Stripe and the platform toggle is turned on, Stripe handles the actual tax calculation automatically during checkout and invoice generation.
- New customers are asked for their country and postal code during checkout
- Postal code is required for US and Canada
- Stripe calculates the correct rate automatically based on customer location and your saved tax registrations
- Tax appears as a separate line item on invoices
- If a customer updates their billing address later, future tax calculations update automatically
What about existing customers?
If you already had customers before enabling tax collection, their next checkout will ask for their country and postal code and tax will apply from that point forward.
If an existing customer updates their billing information on their Billing page, tax will start applying automatically on the next invoice after that change.
Quick setup checklist
- Stripe Tax is activated in your Stripe Dashboard through `More + -> Tax -> Get started`
- At least one tax registration has been added
- The `Enable Stripe Tax` toggle is turned on in the platform under `Agency mode -> Billing & Revenue -> Connect Stripe`
Troubleshooting
If tax is not being applied, there are usually only a few things to check.
- Make sure at least one tax registration exists in Stripe under `Tax -> Registrations`
- Check that the customer has a country on file because Stripe cannot calculate tax without a location
- If you create manual invoices directly in Stripe, enable the tax toggle on the invoice itself because the platform setting only affects subscription checkouts
Only want to charge tax in certain states or countries?
That is exactly how Stripe Tax is designed to work. Stripe only charges tax in places where you have added a registration. Customers in other locations will not be taxed.
Want to turn it off?
Go back to `Connect Stripe` in the platform and turn the `Enable Stripe Tax` toggle off.
New checkouts and invoices will stop including tax, while your registrations remain saved inside Stripe in case you want to enable it again later.