VAT and tax on invoices: how it's calculated

How Raal applies VAT, sales tax, and reverse-charge rules to your orders and invoices.

Written By Andres Kõiva

Last updated 5 days ago

Tax on Raal invoices

Tax on Raal invoices is calculated by Stripe Tax based on your billing identity and the shipment lane. You can see the tax amount at checkout (Step 4 of the order wizard) before paying.

How tax is determined

Three inputs:

  1. Your billing entity's country and tax ID. This comes from the Billing Information you entered via the Stripe customer portal.

  2. The shipment route (collection country to delivery country).

  3. The product class. Raal services are classified as transport and platform services; not goods.

Stripe applies the correct rate at the moment of checkout, after you click Proceed To Checkout on Step 3 of the order wizard. The tax row appears as a separate line in the order summary on Step 4.

VAT specifically (EU customers)

  • If you have a valid EU VAT ID and you're buying from a Raal entity in a different EU country than Estonia, reverse-charge applies. VAT is shown as 0% on your invoice and you self-account for it on your VAT return.

  • If you have a valid VAT ID but you're an Estonian legal entity, local VAT is applied.

  • If you don't have a VAT ID on file (or it's invalid), VAT is applied as if you were a consumer.

Adding or updating your VAT ID

  1. Go to Settings > Billing > Edit Billing Information.

  2. In the Stripe portal, edit billing information.

  3. Add or update the VAT ID.

  4. Save. Stripe validates the VAT ID against the EU VIES database (or the equivalent in non-EU jurisdictions).

  5. New orders use the updated tax treatment immediately.

Outside the EU

For US customers, sales tax is applied based on the state in your billing address (if Raal is required to collect there). For UK customers, UK VAT applies. For other jurisdictions, the relevant local tax rules apply or no tax is collected if Raal isn't registered there.

What about customs costs?

Customs costs (import duties, brokerage fees) are separate from VAT. They appear on Step 3 of the order wizard as their own line. They're passed through at actual cost; Raal doesn't mark them up.

Because they are a pass-through, the customs costs and taxes on your invoice have to match exactly what Raal was charged for your shipment.

When the final amount differs

Under Pay at order placement you pay before the shipment clears customs, so the customs figure at checkout is an estimate. Once the final amounts are settled, Raal reconciles the difference quarterly:

  • If the actual cost was higher than you were charged, you receive an invoice for the difference.

  • If it was lower, you receive a credit invoice.

Under pay after order fulfilment and the monthly consolidated invoice the invoice is raised after the shipment is complete, so the actual customs costs are billed as they stand and there is nothing to reconcile later.

Where to find tax on your invoice

  • Per-order invoices (Pay at placement, Pay after fulfilment): the invoice issued by Stripe shows the net amount, VAT line, and gross total. Your Raal order detail page also shows the same breakdown.

  • Monthly consolidated invoice: one invoice per month with VAT calculated on the total.

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