How to Create VAT Tax Calculation Rules
This tutorial will explain how to manually set up VAT Tax Calculation Rules (Tax Classes).
To Create VAT Tax Calculation Rules click Sell (1) then choose the Taxes (2) area.
Premium Plus account holders will need to choose the store they want to manage and click the Pencil (Edit) Icon.
For the Taxing Method (3) choose Value Added Tax (VAT).
For Tax Service (4) choose None.
Decide if you want to Apply Coupons (5) before or after taxes then click Add Tax Class (6).
When the page refreshes you'll see these fields.
Tax Class Name (7) - The tax class name is used for internal identification purposes only so that you can easily identify your different tax classes when you apply them to each of your products. Below are some examples of tax class names.
- Digital Goods
- Tangible Goods
- Services & Subscriptions
Default Class (8) - Select "Yes" if this is the class that should be applied to all of your store's products by default. Don't forget that you can specify which tax class is used for each product you sell, so you can apply different tax rates to each of your products. There can only be one default tax class.
Shipping Class (9) - Select "Yes" if this is the class that should be used to tax shipping costs. Select "No" if you don't want to tax shipping costs. There can only be one shipping tax class.
Class Rules (10) - This is where you have a choice to populate the fields manually or with Auto-Fill.
If populating manually you'll need to populate each of these fields.
- Country Code - Please use the Alpha-2 Code as outlined in the ISO Country Code Assignments
- State - Use an asterisk (*)
- City - Use an asterisk (*)
- Postal (zip code) - Use an asterisk (*)
- Rate (%) - Rates can be up to 2 decimal points (ie... 10.25%)
If after the first rule you need more click Add Another Rule (11) and a new row for another rule will appear.
If populating with Auto-Fill just click Auto-Fill EU VAT (12) and all VAT Taxes for the EU will auto-fill with the latest VAT information source.
After completing all rules click Save Tax Class (13).
After clicking the Auto-Fill EU VAT button you'll see all of the EU VAT rules.
Again click Save Tax Class (13).
Upon saving you'll see all of the Tax Classes (14).
If you want to edit your VAT Tax Classes click the Pencil (Edit) Icon. To delete click the X (Delete) Icon.
Remember that taxation is granular if needed. This means that tax settings can be adjusted within the Inventory Item (Step 2 - Pricing & Tracking). You'll be able to choose the default tax class or any other tax class or no tax at all.