diff --git a/app/DataMapper/Tax/BaseRule.php b/app/DataMapper/Tax/BaseRule.php
index 983d558ae8e7..22c457e917d3 100644
--- a/app/DataMapper/Tax/BaseRule.php
+++ b/app/DataMapper/Tax/BaseRule.php
@@ -173,6 +173,15 @@ class BaseRule implements RuleInterface
         return $this;
     }
 
+    public function defaultForeign(): self
+    {
+
+        $this->tax_rate1 = $this->client->company->tax_data->regions->{$this->client_region}->subregions->{$this->client_subregion}->tax_rate;
+        $this->tax_name1 = $this->client->company->tax_data->regions->{$this->client_region}->subregions->{$this->client_subregion}->tax_name;
+
+        return $this;
+    }
+
     public function setTaxData(Response $tax_data): self
     {
         $this->tax_data = $tax_data;
diff --git a/app/DataMapper/Tax/US/Rule.php b/app/DataMapper/Tax/US/Rule.php
index 6f774eadc4b4..c62f6f1864fb 100644
--- a/app/DataMapper/Tax/US/Rule.php
+++ b/app/DataMapper/Tax/US/Rule.php
@@ -17,7 +17,11 @@ use App\Models\Product;
 
 class Rule extends BaseRule implements RuleInterface
 {
-    
+    /**
+     * The rules apply US => US taxes using the tax calculator.
+     * 
+     * US => Foreign taxes we check the product types still for exemptions, and we all back to the client country tax rate.
+     */
     public function init(): self
     {
         $this->calculateRates();
@@ -42,6 +46,13 @@ class Rule extends BaseRule implements RuleInterface
             return $this;
         } elseif($this->isTaxableRegion()) { //other regions outside of US
 
+            match($item->tax_id) {
+                Product::PRODUCT_TYPE_EXEMPT => $this->taxExempt(),
+                Product::PRODUCT_TYPE_REDUCED_TAX => $this->taxReduced(),
+                Product::PRODUCT_TYPE_OVERRIDE_TAX => $this->override(),
+                default => $this->defaultForeign(),
+            };
+
         }
         return $this;
 
diff --git a/tests/Unit/Tax/UsTaxTest.php b/tests/Unit/Tax/UsTaxTest.php
index da15968b7ef4..f08b295b3829 100644
--- a/tests/Unit/Tax/UsTaxTest.php
+++ b/tests/Unit/Tax/UsTaxTest.php
@@ -15,6 +15,7 @@ use Tests\TestCase;
 use App\Models\Client;
 use App\Models\Company;
 use App\Models\Invoice;
+use App\Models\Product;
 use Tests\MockAccountData;
 use App\DataMapper\Tax\DE\Rule;
 use App\DataMapper\Tax\TaxModel;
@@ -145,6 +146,209 @@ class UsTaxTest extends TestCase
         return $invoice;
     }
 
+    public function testForeignTaxesEnabledWithExemptProduct()
+    {
+            $settings = CompanySettings::defaults();
+            $settings->country_id = '840'; // germany
+
+            $tax_data = new TaxModel();
+            $tax_data->seller_subregion = 'CA';
+            $tax_data->regions->US->has_sales_above_threshold = true;
+            $tax_data->regions->US->tax_all_subregions = true;
+            $tax_data->regions->EU->has_sales_above_threshold = true;
+            $tax_data->regions->EU->tax_all_subregions = true;
+            $tax_data->regions->EU->subregions->DE->tax_rate = 21;
+
+            $company = Company::factory()->create([
+                'account_id' => $this->account->id,
+                'settings' => $settings,
+                'tax_data' => $tax_data,
+                'calculate_taxes' => true,
+            ]);
+
+            $client = Client::factory()->create([
+                'user_id' => $this->user->id,
+                'company_id' => $company->id,
+                'country_id' => 276,
+                'shipping_country_id' => 276,
+                'has_valid_vat_number' => false,
+                'postal_code' => 'xx',
+            ]);
+
+            $invoice = Invoice::factory()->create([
+                'company_id' => $company->id,
+                'client_id' => $client->id,
+                'status_id' => 1,
+                'user_id' => $this->user->id,
+                'uses_inclusive_taxes' => false,
+                'discount' => 0,
+                'line_items' => [
+                    [
+                        'product_key' => 'Test',
+                        'notes' => 'Test',
+                        'cost' => 100,
+                        'quantity' => 1,
+                        'tax_name1' => '',
+                        'tax_rate1' => 0,
+                        'tax_name2' => '',
+                        'tax_rate2' => 0,
+                        'tax_name3' => '',
+                        'tax_rate3' => 0,
+                        'type_id' => '1',
+                        'tax_id' => Product::PRODUCT_TYPE_EXEMPT,
+                    ],
+                ],
+                'tax_rate1' => 0,
+                'tax_rate2' => 0,
+                'tax_rate3' => 0,
+                'tax_name1' => '',
+                'tax_name2' => '',
+                'tax_name3' => '',
+                'tax_data' => new Response($this->mock_response),
+            ]);
+
+            $invoice = $invoice->calc()->getInvoice()->service()->markSent()->save();
+
+            $this->assertEquals(100, $invoice->amount);
+
+    }
+
+
+    public function testForeignTaxesDisabled()
+    {
+            $settings = CompanySettings::defaults();
+            $settings->country_id = '840'; // germany
+
+            $tax_data = new TaxModel();
+            $tax_data->seller_subregion = 'CA';
+            $tax_data->regions->US->has_sales_above_threshold = true;
+            $tax_data->regions->US->tax_all_subregions = true;
+            $tax_data->regions->EU->has_sales_above_threshold = true;
+            $tax_data->regions->EU->tax_all_subregions = false;
+            $tax_data->regions->EU->subregions->DE->tax_rate = 21;
+
+            $company = Company::factory()->create([
+                'account_id' => $this->account->id,
+                'settings' => $settings,
+                'tax_data' => $tax_data,
+                'calculate_taxes' => true,
+            ]);
+
+            $client = Client::factory()->create([
+                'user_id' => $this->user->id,
+                'company_id' => $company->id,
+                'country_id' => 276,
+                'shipping_country_id' => 276,
+                'has_valid_vat_number' => false,
+                'postal_code' => 'xx',
+            ]);
+
+            $invoice = Invoice::factory()->create([
+                'company_id' => $company->id,
+                'client_id' => $client->id,
+                'status_id' => 1,
+                'user_id' => $this->user->id,
+                'uses_inclusive_taxes' => false,
+                'discount' => 0,
+                'line_items' => [
+                    [
+                        'product_key' => 'Test',
+                        'notes' => 'Test',
+                        'cost' => 100,
+                        'quantity' => 1,
+                        'tax_name1' => '',
+                        'tax_rate1' => 0,
+                        'tax_name2' => '',
+                        'tax_rate2' => 0,
+                        'tax_name3' => '',
+                        'tax_rate3' => 0,
+                        'type_id' => '1',
+                        'tax_id' => Product::PRODUCT_TYPE_PHYSICAL,
+                    ],
+                ],
+                'tax_rate1' => 0,
+                'tax_rate2' => 0,
+                'tax_rate3' => 0,
+                'tax_name1' => '',
+                'tax_name2' => '',
+                'tax_name3' => '',
+                'tax_data' => new Response($this->mock_response),
+            ]);
+
+            $invoice = $invoice->calc()->getInvoice()->service()->markSent()->save();
+
+            $this->assertEquals(100, $invoice->amount);
+
+    }
+
+
+    public function testForeignTaxesEnabled()
+    {
+            $settings = CompanySettings::defaults();
+            $settings->country_id = '840'; // germany
+
+            $tax_data = new TaxModel();
+            $tax_data->seller_subregion = 'CA';
+            $tax_data->regions->US->has_sales_above_threshold = true;
+            $tax_data->regions->US->tax_all_subregions = true;
+            $tax_data->regions->EU->has_sales_above_threshold = true;
+            $tax_data->regions->EU->tax_all_subregions = true;
+            $tax_data->regions->EU->subregions->DE->tax_rate = 21;
+
+            $company = Company::factory()->create([
+                'account_id' => $this->account->id,
+                'settings' => $settings,
+                'tax_data' => $tax_data,
+                'calculate_taxes' => true,
+            ]);
+
+            $client = Client::factory()->create([
+                'user_id' => $this->user->id,
+                'company_id' => $company->id,
+                'country_id' => 276,
+                'shipping_country_id' => 276,
+                'has_valid_vat_number' => false,
+                'postal_code' => 'xx',
+            ]);
+
+            $invoice = Invoice::factory()->create([
+                'company_id' => $company->id,
+                'client_id' => $client->id,
+                'status_id' => 1,
+                'user_id' => $this->user->id,
+                'uses_inclusive_taxes' => false,
+                'discount' => 0,
+                'line_items' => [
+                    [
+                        'product_key' => 'Test',
+                        'notes' => 'Test',
+                        'cost' => 100,
+                        'quantity' => 1,
+                        'tax_name1' => '',
+                        'tax_rate1' => 0,
+                        'tax_name2' => '',
+                        'tax_rate2' => 0,
+                        'tax_name3' => '',
+                        'tax_rate3' => 0,
+                        'type_id' => '1',
+                        'tax_id' => Product::PRODUCT_TYPE_PHYSICAL,
+                    ],
+                ],
+                'tax_rate1' => 0,
+                'tax_rate2' => 0,
+                'tax_rate3' => 0,
+                'tax_name1' => '',
+                'tax_name2' => '',
+                'tax_name3' => '',
+                'tax_data' => new Response($this->mock_response),
+            ]);
+
+            $invoice = $invoice->calc()->getInvoice()->service()->markSent()->save();
+
+            $this->assertEquals(121, $invoice->amount);
+
+    }
+
     public function testCompanyTaxAllOffButTaxUSRegion()
     {