> ## Documentation Index
> Fetch the complete documentation index at: https://waffo.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Tax

> Waffo Global Tax is an intelligent tax solution designed specifically for cross-border digital businesses. Whether your customers are in the US, the EU/UK, or the Asia-Pacific region, we automatically identify and handle local tax compliance.

## Overview

Waffo Global Tax is an intelligent tax solution designed specifically for cross-border digital businesses. Whether your customers are in the US (Sales Tax), the EU/UK (VAT), or the Asia-Pacific region (GST), we automatically identify and handle local tax compliance.

### Core value

**MoR Model** — Operating under the **Merchant of Record (MoR)** model, Waffo acts as the nominal seller in your global transactions.

Traditional Model

You are required to register for **tax IDs**, **hire local accountants**, and **file** monthly/quarterly returns in every country/state where you do business.

Waffo MoR Model

We hold tax registrations in major global markets. You do not need to handle any tax registration or filing work; we assume the **full legal responsibility** for collecting, reporting, and remitting taxes to governments worldwide.

***

### Supported global tax types

The system covers indirect tax regimes in **100+ countries and regions**:

| Region | Tax Types |
| - | - |
| North America | US Sales Tax (precise to state/county/city level), Canada GST/HST/PST. |
| Europe (EMEA) | EU-27 VAT, UK VAT, Middle East VAT. |
| Asia-Pacific (APAC) | Australia/New Zealand GST, Japan JCT, Singapore GST, etc. |

***

## Core capabilities

Addressing the complexity of global tax systems, we provide the following intelligent processing capabilities:

### Smart cross-border B2B vs. B2C determination

In Europe and parts of APAC, tax rules for business-to-business (B2B) transactions differ significantly from consumer (B2C) transactions.

### Dynamic pricing display (inclusive vs. exclusive)

Consumers in different regions have different price display habits. The system supports automatic switching based on IP:

| Type | Region | Example Behavior |
| - | - | - |
| Tax Exclusive | US | Display price \$100; tax is added at checkout. |
| Tax Inclusive | Europe/Japan/Korea | Display price €100 (tax included); the system automatically calculates the tax portion from the total to improve conversion rates. |

### Product tax code mapping

Tax rates vary across countries for different product types (e.g., eBooks, SaaS software, online courses, physical goods). We provide standardized Tax Codes; you only need to map your products once to automatically adapt to the global tax rate library.

***

## Service workflow

### Collection (transaction phase)

**1. Location Locking**

Utilizes multiple dimensions including consumer IP, credit card issuing country, and billing address to precisely determine the tax jurisdiction.

**2. Real-Time Calculation**

Returns accurate tax amounts in milliseconds at checkout, supporting multi-currency calculations.

**3. Compliant Invoicing**

Automatically generates compliant electronic invoices (e.g., EU VAT Invoices) upon successful transaction and sends them to the consumer.

### Filing (compliance phase)

**1. Unified Reconciliation**

Standardizes tax data from different global currencies and tax rates.

**2. Automated Filing**

Waffo's global tax team submits returns according to each country's filing cycle (monthly/quarterly/yearly).

**3. Tax Remittance**

We pay taxes directly to tax authorities; you do not need to perform any cross-border remittance operations.

***

## Fund & security assurance

### Independent tax escrow

To ensure fund security, all collected taxes are automatically diverted to a Tax Escrow Account at settlement. These funds are physically segregated from your revenue and are dedicated solely for remittance to tax authorities.

### Risk reserve & FX buffer

Due to multi-currency settlements (e.g., collecting VAT in Euros but potentially converting for filing) and potential refund adjustments, the system holds a small percentage (e.g., 5%) as a risk reserve.

* Used to cover discrepancies caused by exchange rate fluctuations.
* Used to handle cross-period refund adjustments.

> [!NOTE]
>
> **Note:** The reserve is released back to the merchant account after the filing cycle concludes without issues.

***

## Integration & configuration

### Minimalist integration

### Dashboard configuration

* **Whitelist Mechanism:** Supports configuring tax switches for specific countries/regions (e.g., you can choose to enable only European VAT while handling US tax yourself).
* **Product Category Mapping:** Associate your SKUs with system-preset tax categories (e.g., "Digital Services") in the dashboard.

[View API Documentation →](/docs/api-reference/introduction) for parameter examples and integration guides.

***

## Frequently asked questions

> **I only sell to European customers. Do I need to register for the EU OSS (One Stop Shop)?**
>
> No. Under the Waffo MoR Model, we have already completed OSS registration. The transaction is treated as you selling to Waffo, and then Waffo selling to the European customer. Therefore, the compliance responsibility lies with us.

> **Why is the same product sold to US customers as "$100 + Tax" but to German customers as "$100 (Tax Included)"?**
>
> This is to align with local consumer habits. The US is accustomed to "Tax Exclusive" pricing, where the displayed price does not include tax; Germany is accustomed to "Tax Inclusive" pricing. The system automatically adjusts the display logic based on "Pricing Strategy" configurations to maximize conversion rates.

> **How do business customers (B2B) apply for tax exemption?**
>
> On the checkout page, we provide an entry for "Add VAT ID." After the customer enters their tax ID, the system calls databases like EU VIES in real-time to verify it. Upon successful validation, the order amount will automatically update to 0 tax (Reverse Charge).

> **Will tax fees be refunded if a refund occurs?**
>
> Yes. In the case of a full refund, we refund the full tax amount to the consumer and deduct this tax credit from the next filing with the tax authority. You do not bear this loss.

***

Need help? [Contact support](mailto:support@waffo.com)


This documentation is built and hosted on [Mintlify](https://mintlify.com), a developer documentation platform.