Setting up taxes – WebSelf Simple Help Center

As an online merchant, you may need to collect taxes (sales taxes in the US, VAT in Europe and Japan, GST in Canada, etc) and then periodically forward the collected tax amounts to appropriate tax authorities.

Note:
Taxes are enabled by default.
WebSelf calculates taxes based on your location and that of your customers. Your store will charge appropriate VAT at checkout, following regional and national tax rules.

What taxes should I set up

Taxation rules differ depending on the country where the online business is based — tax rates can depend on types of products, your business location, consumers’ location, and more. For example, merchants that sell e-goods to customers in the EU, should charge taxes on digital products.

Before proceeding with online sales, it's advisable to consult with local tax experts to determine whether you are selling taxable goods and to ascertain the applicable tax rates associated with them.

How to configure taxes

Once you have determined the jurisdictions where your business is obligated to charge taxes, it's important to configure your store to comply with the local tax laws of those regions.

There are two ways to set up taxes in a store:

Automatic taxes. They are available for merchants in the USA, Europe, UK, Canada, Australia, New Zealand, India, South Africa, Taiwan, Singapore, Malaysia, Indonesia, Saudi Arabia, Canary Islands, Melilla, and Ceuta. Automatic taxes provide up-to-date rates across the store and can be enabled in one button click.
Manual taxes. If automatic taxes are not available for your country or your business requires a specifically tailored taxation scheme, you can configure taxes manually.

Setting up automatic taxes

If you are based in a country where automatic calculation of taxes is available, you can enable it in your store. As the result, the up-to-date tax rates of your region will apply to all products.

To set up automatic taxes:

Enter your actual company address in the store admin, Settings → General. This address is needed to calculate and apply the right tax rate to orders at checkout.
Enable automatic taxes in Settings → Taxes:

Once enabled, automatic taxes will compute an accurate tax rate at checkout by considering the locations of both you and your customer. Subsequently, it will apply the relevant tax to each order accordingly.

By default, the same standard tax rate of your store’s region applies to all the products. If some of your products are taxed differently (e.g., they are tax-exempt), you can change the tax rate for them.

Setting up manual taxes

You can manually configure your store to calculate tax rates for various regions, zones, and countries. It's advisable to set up taxes manually if:
— automatic taxes are not available for your country (currently available for the US, Europe, UK, Canada, Australia, New Zealand, India, South Africa, and some other countries)
— you need a complex taxation scheme tailored to your business (e.g., you want to charge taxes when selling worldwide).

You can configure taxes manually in the store admin, Settings → Taxes. Below is the instruction on how to add a 10% tax for a state to illustrate the setup process:

Step 1 — Add a zone

Create a destination zone for the tax rate to apply. If the same tax rate applies to several different states, you can create one zone consisting of these states and set up a tax rate for this zone.

To add a zone for the tax:

From your store admin, go to Settings → Taxes & Invoices.
In the Manual section, click Manage Tax Rates.
Click + Add New Tax.
Click Save.
Click Manage zones (global) to open the Destination zones page.
Click + Add New Zone.
Click Add State, Add Country, or Add Region and add the necessary state, country, or region.
Set the name for the zone that is clear to you. For example, States with 10% tax rate. Customers won't see the name you picked for the zone.
Save the changes.

Step 2 — Add a tax rate for the zone

From your store admin, go to Settings → Taxes & Invoices. If automatic taxes are enabled, make sure to disable them.
In the Manual section click Manage Tax Rates.
Click Add New Tax.
Enter your tax name. For example, 10% Tax. Customers will see the name you picked for the tax at checkout.
If the tax applies to all products, tick Enabled by default for all products option.
Choose whether the tax applies only to the subtotal or to the subtotal and shipping.
(optional, based on your country) Tick Include tax in product prices option if you'd like the price to include tax. Customers will see the tax-inclusive product prices in catalog as soon as your store detects their location. Otherwise, tax will be added at checkout once the buyer fills out the address form.

or

Click Manage tax displaying settings → Change Pricing Settings. This way, you can set whether you enter prices in your store with taxes included (gross prices) or without taxes (net prices). In case of net prices, the tax is added at checkout.

Your product prices will not be automatically updated if you switch the pricing scheme. You will need to check your product prices and update them manually after the switch to avoid unexpected price changes.
Choose what defines the zone for a customer. It can be the shipping or billing address.
Click Specify rates per zone. Select the zone you created in the Step 1 and enter the applicable tax rate.
Make sure the tax is enabled and save the changes.

If you have several taxes and/or zones, repeat the steps above for each of them.

If you need to enable or disable a tax for a certain product, you can do it in the product’s edit page, Taxes tab. Learn more about product-specific taxes.

How to get a tax report

Different countries have distinct tax reporting requirements. It's essential to consult with local tax professionals to determine how and how often you should file and remit the collected taxes to the government.

If you use an accounting software when working on tax reports, you can import there your store’s order data, including the collected taxes.

For automatic import of order data, you can connect your store with Quickbooks, Xero or Freshbooks accounting software (integration with these services is available in form of apps from the App Market).

Alternatively, you can export the order data from your store to a CSV file. Subsequently, you can import the downloaded CSV file into your accounting software or provide it to your accountant for handling. Additionally, you have the option to open the file in a spreadsheet and manually summarize the numbers if preferred.

If necessary, you can also print out invoices (and/or tax invoices) for your records or download them as a PDF file.

With automatic taxes, US merchants can also get sales tax report and file taxes via the TaxJar app.

How to Manage Tax-Exempt Customers
If you have tax-exempt customers, you can mark them as such in the list of customers to prevent them from being charged taxes at your store's checkout.

To create the list of tax-exempt customers:

1.- From your store admin, go to Settings → Taxes & Invoices.

2.- In the Tools section, click Manage customers.