Tutorial – WooCommerce Tax Settings

Tutorial – WooCommerce Tax Settings

WooCommerce Tax Settings let you to set tax rates in your products so that you do not have any problem with the tax office. By setting tax properties you can automatically charge taxes on both product price and shipping price. You can also put the taxes in for different countries, cities, states and postcodes.

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WooCommerce Tax Settings

WooCommerce Tax Settings

I will explain how WooCommerce Tax Rates works. Take for example, if your shop has 2 orders one from United Kingdom and other from United States. The UK area has tax of 20% while US area has tax of 15%, so in that case the UK customer will pay 20% tax while US customer will pay 15% tax for their order.

All this can be managed easily with WooCommerce tax settings.

  • UK customer price – X + 20% OF X = 1.2X
  • US customer price – X + 15% OF X = 1.15X

HERE X is the price of the product.

woocommerce tax settings

WooCommerce Tax Settings

There are not one but multiple shipping settings in WooCommerce. Also you can set the shipping rates for these shippings. To understand it, please read this tutorial on WooCommerce Shipping Settings.
The following settings are available:

a. Enable Taxes let you to tell WooCommerce, whether or not it should deal with tax calculations, if taxes are disabled then the rest of the options of this page have no effect.

b. Prices Entered With Tax let you to specify whether the prices of products are inclusive of taxes or exclusive of taxes.

c. Calculate Tax Based On will allow you to specify how the tax is calculated for products. There are three options to choose from – Customer shipping address, Customer billing address and Shop base address.

Mostly people use Custom shipping address because in case a customer asks you to ship his product to a destination having other state level taxes, then you may be in loss here. So consider it thoroughly or consult your tax adviser for different regulations and taxes.

d. Shipping Tax Class specifies how the shipping tax is calculated. The option Shipping tax class based on cart items will calculate shipping tax based on the tax class the product is using.

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You can select the Tax Class of a product from the General tab of the Product Data area. Other options include Standard Rate, Reduced Rate or Zero Rate which you can enter from the Standard Rates, Reduced Rate Rates and Zero Rate Rates tabs given at the top of the page.

These classes including any new class created by you can then be assigned to the products from the General tab area during product creation.

assigning custom tax Classes to products in woocommerce

Assigning Custom Tax Classes To Products

e. Rounding specifies whether to round tax at subtotal level or round tax for every product in the cart.

f. Additional Tax Classes allow you to add new classes (one per line) in order to add them to your products. To get started, WooCommerce includes Standard, Reduced Rate and Zero Rate tax classes.

g. Display Prices in the Shop let you to show prices in your shop with or without tax.

h. Display Prices During Cart and Checkout let you to display prices in cart and checkout page with tax or without tax.

i. Price Display Suffix allows to add your custom text against the prices of products in your shop. This will help you to explain your prices to customers. You can also have prices substituted using one of the following – {price_including_tax} or {price_excluding_tax}.

g. Display Tax Totals specifies how to show tax totals to your customer. You can select either from Itemized or As a single total.

Adding Custom WooCommerce Tax Rates to Tax Classes

WooCommerce includes Standard, Reduced Rate and Zero Rate tax classes from the beginning, and you can add your tax rates broken down to country, state, city and zip levels. Insert row and Remove selected row(s) button, given at the bottom, let you to add or remove the rows one at a time.

In addition to this there are also some attributes which are discussed below:
  • Priority helps to specify which tax to apply in overlapping regions. Take for example – A shipping address is in postcode/ zip area and has tax rate A. The shipping city which is in the same post code has tax rate B. Here which every tax has a higher priority, the tax rate of the same will apply.
  • Compound specifies the additional taxes to be applied.
  • Shipping specifies whether the tax rate will apply on shipping too. We advise you to consult your tax advisor regarding taxes applied in other states and countries.
    Adding Custom Tax Rates to Tax Classes

    Adding Custom Tax Rates to Tax Classes

WooCommerce Settings Tutorials

Below are the WooCommerce Settings tutorials which will help you to do various setting in your Website.

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