If you're using paid shipping methods in your online store, it's probable that their costs will be subject to taxation. By default, how tax on shipping is calculated is pre-set according to what’s considered the most commonly used schema in your country.
You can customize how shipping costs are taxed at checkout and select the option that aligns better with your business requirements. This could be based on recommendations from your legal advisor or other considerations.
You can customize how shipping costs are taxed at checkout and select the option that aligns better with your business requirements. This could be based on recommendations from your legal advisor or other considerations.
You can switch between two shipping taxation options:
-
Shipping taxes depend on products in the shopping cart.
If all products in the cart have the same tax rate assigned to them, shipping will be taxed at that same rate. If products in the cart have different tax rates, tax on the shipping costs will be calculated proportionately to the product prices. -
Shipping taxes do not depend on products in the shopping cart.
A fixed tax rate will be applied to shipping costs at checkout.
– If you use manual taxes in your store, all the tax rates you set to apply to both the order subtotal and shipping are used. Rates that apply only to the order subtotal will not be used to tax shipping.
– If you use automatic taxes — as well as if you don’t have any manual taxes created in your store — shipping costs are taxed according to the standard rate applicable in customer’s location.
Note:
Changing your tax on shipping schema is currently available in the EU, UK, and Switzerland in stores where product-specific tax rates are used. Make sure you get appropriate legal advice before changing any tax settings.
To change your tax on shipping schema:
- From your store admin, go to Settings → Taxes & Invoices.
- Scroll down to Settings and find the Tax on shipping… block at the bottom.
- Click Edit and select the tax on shipping option you want to apply in your store:
- Click Save.
Now, the tax on shipping option you chose will be applied to all the new orders in your store. Customers will see its breakdown in their shopping cart at checkout, in order invoices, as well as in tax invoices.
Note:
For stores situated outside the EU, UK, or Switzerland: If you wish to modify the tax on shipping schema in your store, please reach out to support for assistance.