# Tax and refunds

> How Polar handles tax on your orders, and how refunds flow between WooCommerce 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 **Prices and tax** in the plugin's settings:

- **Prices include tax** (the default): each checkout sends your WooCommerce order total as a tax-inclusive price, and Polar takes its tax out of it.
- **Prices exclude tax:** Polar adds sales tax or VAT for the shopper's location at checkout. The WooCommerce order total stays the price before tax, and the shopper's order page and emails say what Polar added and what they were charged. Payments and refunds are matched against the price before tax.

Switching syncs your products to Polar again in the background. Subscriptions already sold keep the price, and the tax treatment, they were bought with.

**Turn WooCommerce taxes off.** Otherwise your totals include a tax you never collect. The settings panel and Site Health both warn while they're on.

The order screen shows Polar's fee, the tax it collected and what's left, next to the order total.

### Business customers

When the billing company is filled in, the checkout opens on Polar as a business purchase, with the company's name ready. Shoppers can enter their VAT or tax ID on Polar's page. A plugin that collects a VAT ID at your checkout can pass it on with the `zealden_polar_customer_tax_id` filter; if Polar rejects it, the checkout starts without it and the shopper can enter it there.

## Refunds

- **From WooCommerce:** refund in the order screen, and the money goes back through Polar.
- **From Polar:** refunds made in Polar's dashboard show up on the order too.
- A refund Polar couldn't pay, or cancelled after accepting it, is noted on the order.
- Each order remembers the environment it was paid in, so a refund reaches the right Polar organization even after you've gone live.

## Receipts

Shoppers can download Polar's receipt from the order-received page and from their account.

Checked against Payments via Polar for WooCommerce 1.2.3 on main, 19 October 2026.