## Using Manual Tax Rates with Stripe

This section covers how to manually define and collect taxes for your Stripe transactions, primarily focusing on scenarios where Stripe Tax's automated calculations might not be suitable or when you prefer a more hands-on approach.

### When to Use Manual Tax Rates

While Stripe Tax is recommended for its automated, global tax compliance, manual tax rates are useful in specific situations:

*   **Fixed Tax Rates:** When you know the exact tax rate to charge your customers before they begin the checkout process. This is common if you only sell to customers in a single region with a consistent tax rate (e.g., 20% VAT for all UK customers).
*   **Third-Party Integrations without Native Support:** If you use a third-party tax provider that does not have a native integration with Stripe, you might need to manage tax rates manually.
*   **Simple Tax Needs:** For businesses with very straightforward tax requirements that don't necessitate the complexity of automated solutions.

### How to Collect Taxes with Manual Tax Rates

Stripe supports manually defining tax rates to collect taxes (sales tax, VAT, GST, and others) for different locations. The primary method for this is through **Checkout**.

#### Two Ways to Collect Taxes in Checkout:

1.  **Fixed Tax Rates:**
    *   **Description:** Use fixed tax rates when the tax amount is predetermined and doesn't require customer-specific information to calculate.
    *   **Example:** You exclusively sell to customers in the UK and always charge a 20% VAT. You would define a 20% tax rate and apply it to your products or the entire checkout.

2.  **Dynamic Tax Rates with the Prices API:**
    *   **Description:** Use dynamic tax rates when you need more information from your customer (such as their billing or shipping address) to determine the correct tax rate.
    *   **Process:** You create tax rates for different regions (e.g., a 20% VAT tax rate for customers in the UK and a 7.25% sales tax rate for customers in California, US). Stripe then attempts to match your customer's location to one of these defined tax rates.

### Key Considerations:

*   **Stripe Tax Recommendation:** For automatic and comprehensive tax support across 60+ countries, Stripe Tax is generally recommended over manual tax rates.
*   **Management:** You can manage and create tax rates directly within the Stripe Dashboard or programmatically via the API.
*   **Application:** Once created, tax rates can be applied to:
    *   Individual invoice items.
    *   The entire subtotal of an invoice.
    *   Subscriptions.
    *   One-time payments made through Checkout.

By understanding these options, you can choose the most appropriate method for collecting taxes based on your business needs and technical capabilities.