Understand taxes and credits

Appropriate roles: Global admin | User management admin | Billing admin | Admin agent | Sales agent

Taxes and VAT

You're taxed based on your details, not your customers' details, because the billing relationship is between Microsoft and you.

You can submit your tax identifier during the account setup process or through a support request later. You'll see any changes reflected on your next billing cycle.

For withholding and sales tax exemption, you must submit tax documentation through a support request. You'll see the changes and appropriate refunds on your next billing cycle. Find out more information on submitting withholding tax.

For value-added tax (VAT) exemption, you must submit your VAT ID (validated by Microsoft) through Accounts Settings > Legal Info > Reseller > Bill-to Info. If the VAT ID is submitted after account setup, your invoices prior to that request won't have a VAT ID stamped on the invoice PDF. You'll see the changes on your next billing cycle.

Work with your tax advisor to file tax exemptions based on your location and the locations of your customers. For more tax information, consult your local tax office or tax advisor.

Add a VATID to your billing profile

You can update your billing profile to include your VAT ID by using the following procedure (but not in every country or region).

To update your billing profile with your VAT ID, use the following steps:

1. Sign in to Partner Center and select the Settings (gear) icon.
2. Select Account settings.
3. Select Legal Info and click on the Reseller tab.
4. In the Bill-to Info section, choose Update.
5. For Company Tax ID, specify your VAT ID number.

File a tax exemption

Before filing a tax exemption, make sure you understand the following points:

• You must file a tax exemption for each CSP tenant.

• You must submit either your tax ID number or Federal Employer Identification Number (FEIN). This number usually appears on your tax certificate. To learn more about updating VAT or your tax ID number, see Understand taxes and credits.

• Depending on your location, your sales tax exemption has legal guidelines specific to the local Department of Tax Revenue (or similar department) and must be managed accordingly. While many locations have blanket tax certificates that are renewed annually, some locations might renew at two or more years. Verify this and other information by checking your certificate or contacting your local tax authority.

When you're ready to file your tax exemption, request support through Partner Center and supply the appropriate information.

Common tax forms

To set up Microsoft as a company in your Accounts Payable system, you'll need certain tax forms, including Certificates of Tax Residency. Go to Partner Center support topic - Tax information (CSP) to download them and consult your local tax authority to ensure you're meeting all requirements.

Adjustments/Credits/Cancellations

Cancellation credits for legacy licensed-based services are prorated for unused days for mid-cycle cancellations (and license decreases) according to this formula:

[ROUND((ROUND(Unit Price * Quantity / Number of days in prorated Month, 2) * Number of prorated days) / Quantity, 2) * Quantity]

Cancellation credits for new commerce licensed-based services are prorated based on the billable days according to this formula:

EffectiveUnitPrice = UnitPrice / number of days in the charge cycle * number of billing days

Total(refund amount) = ROUNDDOWN(EffectiveUnitPrice * PCToBCExchangeRate,2) * BillableQuantity

Support

For questions about tax exemptions, refunds, or other tax-related questions, request support through Partner Center. Allow two weeks for Microsoft to contact you and resolve the issue.

Next steps

• Tax and tax exemptions