The Taxes section allows you to configure and manage tax settings. This section provides tools to set up tax rates, tax zones, customer and product tax classes, and tax rules. By customizing these elements, you can ensure compliance with regional tax regulations and apply the correct tax rates to each transaction. Proper configuration of taxes ensures accurate pricing, smooth checkout processes, and compliance with local and international tax laws.
- Navigate to Taxes > Taxes in the main menu.
- Click Create.
- Enter the Tax Code.
Only alphanumeric characters (a-z, A-Z, 0-9), hyphens (-), and underscores (_) are allowed.
There cannot be two Taxes with the same code and, once the Tax was saved, the code cannot be updated.
- Enter a Description.
- Enter The Rate. Rates are percentage values ranging from 0 to 100, and they can include decimal points.
- When all the changes were made, click on the Save button, or on Discard to reject the updates.
Customer Tax Classes are categories used to assign different tax rates to specific groups of customers based on their tax status. For example, businesses often have separate tax classes for regular consumers, tax-exempt customers, or wholesale buyers. By assigning a customer to a particular tax class, the correct tax rate will be applied during checkout.
- Customers can be classified by Customer Tax Classes or left without any tax class.
- If a customer as no tax class it won't add specific taxes to the order.
- Navigate to Taxes > Customer Classes in the main menu.
- Click Create.
- Enter the Tax Code.
Only alphanumeric characters (a-z, A-Z, 0-9), hyphens (-), and underscores (_) are allowed.
There cannot be two Classes with the same code and, once the Customer Class was saved, the code cannot be updated.
- Enter a Description.
- When all the changes were made, click on the Save button, or on Discard to reject the updates.
Product Tax Classes are categories used to assign different tax rates to products based on their taxability. This allows you to apply specific tax rules to various types of products, such as standard goods, digital products, or tax-exempt items. Each product is assigned a tax class, and during checkout, the correct tax rate is calculated based on the product's class and the customer's location.
- Products can be classified by Product Tax Classes or left without any tax class.
- If a product has no tax class it won't add specific taxes to the order.
- Navigate to Taxes > Product Classes in the main menu.
- Click Create.
- Enter the Tax Code.
Only alphanumeric characters (a-z, A-Z, 0-9), hyphens (-), and underscores (_) are allowed.
There cannot be two Classes with the same code and, once the Customer Class was saved, the code cannot be updated.
- Enter a Description.
- When all the changes were made, click on the Save button, or on Discard to reject the updates.
Tax Zones are geographic regions that determine the tax rates applied to purchases based on the buyer’s location. These zones can be defined by countries, states, provinces, or postal codes, ensuring that the correct tax rate is charged according to local tax regulations. By configuring tax zones, businesses can apply different tax rules depending on where the customer/store is located.
- Navigate to Taxes > Tax Zones in the main menu.
- Click Create.
- Enter the Name of the zone and a Description.
- Select a Country from the list and select a Region, province or state. The list of countries can be setted at Administration > Settings > General > Available Countries.
- Enter a Postal Code From and a Postal Code To to specify the range of postal codes applicable to this zone.
- When all the changes were made, click on the Save button, or on Discard to reject the updates.
Tax Rules are guidelines set up to determine how taxes are applied to transactions based on various factors such as location, product type, and customer category. These rules define the conditions under which specific tax rates are applied, ensuring compliance with regional tax laws and regulations.
- Navigate to Taxes > Tax Rules in the main menu.
- Click Create.
- Enter the Tax Title and Description.
- Enable/Disable the Rule. It will typically start as disabled until it is completed.
- Select the Tax within the Taxes List.
- Select the Customer Tax Class from the Classes List.
- Select the Product Tax Class from the Classes List.
- Select the Zone from the Tax Zones List.
- When all the changes were made, click on the Save button, or on Discard to reject the updates.
- The taxes are calculated according to the Tax Rules.
- The Tax Rules specify:
- The Tax to be applied (required).
- The Product Tax Code that the Tax is applied to (required).
- The Customer Tax Code that the Tax is applied to (required).
- The geographic Zone that the Tax is applied to (required).
- The Tax has a porcentage that applies to the item total. If other taxes also applies to the same item(s), all of them are calculated over the initial total without affecting the amount of each other.
- The products without Product Tax Code will not have taxes applied.
- The customers without Customer Tax Code will not have taxes.
- Not logged in Customers have a default Customer Class with the code: DEFAULT_GUEST
- The geographic zone to apply a customer is compared against the shipping address or Store address deppending on the selected Address Strategy,
- Global taxes applies to the order are not supported yet.
- Shipping taxes are not supported yet.
As a conclusion of the previous rules, taxes to an order item will be applies only if there are at least one Tax Rule which:
- Its Product Tax Code matches the one set to the product item.
- Its Customer Tax Code matches the one set to the customer item (requires logged in customer). OR its Customer Tax Code is DEFAULT_GUEST (only not logged in customers).
- Its Zone matches the shipping/store address.
- Navigate to Settings > Advanced > Taxes in the main menu.
- Select the desired Address Strategy. Options are:
- Shipping address
- Store address
- When all the changes were made, click on the Save button, or on Discard to reject the updates.
Index - Products - Pricing - Taxes - Logistics