# Tax and refunds

> How Polar handles tax on EDD orders, and how refunds flow between EDD and Polar.

## Tax

Polar is the merchant of record, so it works out, collects and remits sales tax and VAT. Choose how your prices work under **Your prices**:

- **Include tax:** Polar takes its tax out of the price, so customers pay the price they see.
- **Exclude tax:** Polar adds sales tax or VAT on top at its checkout, and EDD's checkout tells the shopper so before they leave.

Only orders started after a change use the new setting.

**Turn off EDD's own taxes**, under **Downloads › Settings › Taxes**. Otherwise an order's total includes a tax Polar doesn't collect, and the amounts won't match.

Polar charges the EDD order total, so EDD's discount codes and fees carry through. Polar's own discount codes aren't offered on its page.

## When the amounts don't match

An order completes only when Polar collected exactly its total, in its currency (before Polar's tax, when your prices exclude tax). If Polar charged anything else, the order is put **on hold**, not completed, with a note giving both amounts. That usually means a Polar discount code or EDD's own tax got involved. Check the payment in Polar before giving access.

## Refunds from EDD

On EDD's refund form, tick **Refund in Polar** and the customer is paid back through Polar. It's unticked by default, as with EDD's own gateways. The amount sent to Polar is the refund before tax; Polar returns its tax with it.

## Refunds made in Polar

When you refund in Polar's dashboard, EDD records it:

- **the whole order**, or
- **exactly one item's remaining total**, recorded against that item. With EDD Software Licensing, that revokes only that item's key.

Any other amount gets a note on the order and is left for you to record in EDD, since there's no right way to split it.

Checked against Payments via Polar for Easy Digital Downloads 1.0.0 on main, 19 October 2026.