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Handle Tax and Compliance

Paigo supports taxation on billing payments. Paigo supports automatic tax mode and manual tax mode. For automatic tax mode, the sales tax calculation and keeping track of tax information is achieved by integrating with tax software provider. Paigo currently supports TaxJar as the integrated tax software. SaaS business can provide the API key of the TaxJar account they own in order to enable automatic sales tax calculations and tracking. For manual tax mode, SaaS business can set arbitrary tax rates with Paigo, and SaaS business is fully responsible of the tax compliance.

Enable TaxJar Integration

Account Setup

A TaxJar account is required to enable integration on Paigo. A Starter Plan is required to use sales tax API. A Professional Plan is required if VAT Calculation for the EU, UK, Australia and Canada is needed for SaaS business. See this page for TaxJar pricing.
Navigate to Account at the top right corner, and select Business Profile. Fill in the necessary business information in order for the tax rate calculation to be accurate.
Navigate to Account at the top right corner, and select State Setting. On this page, provide proper information of state with nexus in order for the tax rate calculation to be accurate. Consult local tax expert for more information on tax nexus. There are also many knowledge base articles about economic nexus.

Retrieve API Key

Paigo uses an API key to work with TaxJar API. Follow these steps to retrieve the API key of your account.
  1. 1.
    Log into TaxJar account console.
  2. 2.
    Click on Account button at the top right corner and select Taxjar API.
  3. 3.
    On the page TaxJar API Token, copy the string under Live Token.

Enable Integration

Navigate to Setting > Integration > TaxJar, fill in the TaxJar API Key copied from above, and click Enable. Paigo will try to authenticate with TaxJar API with the key provided.

Sales Tax Calculation

Paigo can automatically calculate the sales tax amount on each transaction in the billing system with the integration with TaxJar. Navigate to Setting > Tax > Sales Tax Calculation and select Paigo Calculated to enable automatic sales tax calculation. Save the setting to take effect. Note that TaxJar integration has to be enabled as well as described in Enable TaxJar Integration.
There are certain conditions to be met in order for the sales tax calculation to be accurate.
  • SaaS Business Address and SaaS Customer Address Complete and correct business addresses are necessary for Paigo to determine the appropriate tax rates on the transaction. Complete address information should include information such as address lines, city, state, country and postal code. Navigate to Setting > Business to set the business information. Make sure to verify the address correctness with local postal office or government system. For example, in United States, this tool might be used for address validation.
  • Product Tax Category SaaS business is responsible for setting the correct product tax category. Navigate to Setting > Tax > Product Tax Category and select from dropdown the proper category that defines the product. Some of the common product tax categories are listed below. Please consult with local tax experts for the proper product category for taxation purpose.
    • Cloud-based software as a service (SaaS) - Business Use
    • Cloud-based software as a service (SaaS) - Personal Use
    • Software as a Service
    • Cloud-based platform as a service (PaaS) - Business Use
    • Cloud-based platform as a service (PaaS) - Personal Use
    • Cloud-based infrastructure as a service (IaaS) - Business Use
    • Cloud-based infrastructure as a service (IaaS) - Personal Use
In the event of one or more conditions above not met, such as address unable to be validated by TaxJar API, Paigo will treat the sales tax as non-taxable since there is no applicable tax law.
TaxJar supports sales tax calculate of more than 30 countries/regions across North America, European Union and Oceania. For the full list, please see Country List. For other taxation information such as sales tax nexus or threshold, please visit TaxJar Documentation.

Tax Compliance

TaxJar offers automated tax filing and remittance. Paigo records all transactions with sales amount and tax amount using TaxJar API. All the transactions can be retrieved from SaaS business' TaxJar account. See this page for more information on tax filing and compliance.

Tax Exemption

Some SaaS customers may be exempted from sales tax, such as non-profit organization or government organizations. The tax exemption information can be specified in customer profile in Paigo. Navigate to Customer and select a customer profile from the table to see the Tax Exempt field. Tax Exempt is either None or Exempt. When it's set to None, this customer is not exempted from sales tax. All sales tax calculation will be applied. When it's set to Exempt, then all tax calculation will be bypassed and set the tax rate to be 0%.
All tax exempt customer profile will have a customer record in TaxJar system as well, with exempt type being other.

Disable TaxJar Integration

Navigate to Setting > Integration > TaxJar, and click Disable to remove the integration with TaxJar. The API key will be cleared from Paigo.

Manual Tax Mode

SaaS business can choose to take full ownership of the taxation of billing by selecting manual tax mode. To enable manual tax mode, navigate to Settings > Tax > Sales Tax Calculation and select Manually Set. In the Default Tax Rate field, set the tax rate for all billing transactions. Finally, save the Settings to make sure it takes effect.
In the manual tax mode, all invoices will automatically calculate the tax based on the set rate. The SaaS business is responsible for keeping track of the amount of tax collected for the entire organization for tax compliance purpose.