Tax-inclusive vs tax-exclusive pricing
Tax-inclusive prices already contain tax; tax-exclusive prices have tax added on top when the final amount is calculated.
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What it is
Tax-inclusive pricing folds tax into the displayed amount. Tax-exclusive pricing shows the pre-tax amount and adds the calculated tax later, usually at checkout or on the invoice.
The market often decides for you: EU and UK consumer selling requires the advertised price to include VAT, while US sales tax is normally added at checkout. Business quotes commonly separate the tax line either way, because exemptions and recoverable VAT matter.
The same catalog price cannot always produce the same final amount across tax rates. Define whether the advertised amount or your pre-tax revenue stays fixed, then keep rounding consistent across line items, totals, refunds, and credit notes.
Ask AI for it
Implement tax-inclusive and tax-exclusive prices with Stripe Tax. Set tax_behavior on every Stripe Price, calculate tax with automatic_tax from the customer's location and exemption status, and show subtotal, tax, and total before payment. In inclusive mode, back tax out of the displayed price; in exclusive mode, add it on top. Use minor-unit money arithmetic and one documented rounding policy for Stripe Invoices, Refunds, and Credit Notes.