Introduction
SaaS companies thrive on secure customer connections and regular billing cycles. To sustain these relationships, it's advisable to proactively engage with customers and inform them about your intentions to leverage Anrok as a global tax solution. This will ensure that tax changes made on their invoices do not come as a surprise down the line.
To help you communicate tax changes to your customers during your path to compliance, this guide covers the practical communication efforts that should be considered when implementing a sales tax solution.
Notify existing customers about tax changes
SaaS businesses are built on strong customer relationships and recurring billing events. To maintain this strong relationship, we suggest pre-emptively reaching out to your customers and communicating your plans to use Anrok as a global tax solution. When reaching out, you will need to consider the customer’s location, and how that will affect their taxability within the jurisdiction:
- United States customers — For US customers, if a customer is tax-exempt, you will need them to provide a tax exemption certification that documents the exemption the purchaser is claiming to make a tax-free purchase. See What is a sales tax exemption?
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International business customers — For international customers, VATVAT
A type of transaction tax levied on goods and services in more than 170 countries. Like sales tax in the US, VAT is expected to be paid by the consumer making the purchase. is not required to be collected on B2B transactions in many countries if the customer provides the seller with a valid VAT IDVAT ID
Also known as a VAT registration number (VRN), this is the unique number that identifies a taxable business that is registered for VAT.Most businesses (and other persons carrying out an economic activity) are required to have a VAT number.. See What is a VAT Registration Number (“VRN”)?
Below is an example of communication that your business could consider (click here to open the e-mail template):
By proactively reaching out to customers to find out if any customers are tax-exempt or have a VAT ID, you can ensure that this information can be recorded in Anrok and tax correctly charged on the first transaction.
Update your company’s Help Center
Additionally, we would recommend that you add additional content to your customer support site to help your customers understand why tax is being charged, how tax is being calculated, and what to do if the customer is tax-exempt or has a VAT ID. Adding this content to your customer support site can help your customer better self-serve their inquiries into how to answer questions about tax charges.
Tip
Check out Anrok’s guide Why is sales tax so hard to get right for SaaS? for more information on address requirements, which are particularly cumbersome for sales tax in the US.
Note
As with any important project, preparation is a critical step to success. Implementing a global tax solution when your business is still small can help reduce the amount of time and effort required for preparation while change management is easier to execute.
Regardless of size, Anrok can help your business grow by guiding you through the process of getting tax implemented for your business. If you have any questions about preparing your internal team to charge tax, feel free to contact us at support@anrok.com for more information.