My first international invoice nearly carried my home-state sales tax on it, I caught it only because the client asked, politely, what Texas had to do with Toronto. That near-miss forced me to learn the actual framework, which is simpler than it looks: US sales tax stops at the border, and the destination country’s VAT or GST system takes over with its own logic.
The US side is easy: exports carry $0 US sales tax. Never add your home rate to a foreign invoice. The destination side splits by customer type. B2B sales to VAT-registered businesses usually fall under reverse charge, the customer self-reports the VAT, you note “VAT reverse charge, customer responsible” plus their VAT ID on the invoice, and you keep proof of export and their registration. B2C sales, especially digital goods and SaaS, are thornier: many countries require foreign sellers to register and collect once thresholds are crossed (the EU, UK, Australia, and others all run such schemes). Physical goods generally clear VAT at customs, paid by the importer.
Practical habits that keep me safe: collect and validate the customer’s VAT ID for every B2B cross-border invoice (the EU’s VIES system verifies in seconds), keep export evidence files by invoice, and track revenue per country so threshold crossings never surprise me. Currency-wise, I invoice in the client’s currency with the exchange-rate date noted, or in USD with the client accepting conversion, agreed upfront, never assumed.
Takeaway: zero US tax abroad; reverse-charge B2B with validated IDs; watch B2C digital thresholds per country.
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How do you use Invoice Tax Breakdown Calculator?
Open the Invoice Tax Breakdown Calculator in your browser (Split any invoice into subtotal, tax, and total, per line item). Type or paste your input, adjust the options, and copy the result. Everything runs locally on your device with no account and nothing stored, so the three steps below take seconds even for confidential work.
- Enter your numbers into the fields. The result recalculates as you type.
- Switch any unit or option to see the updated answer instantly.
- Copy the result with the copy button, or read the summary beneath it.
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