If you’re running an online business, you’ll need to collect taxes on your sales. Depending on where you’re located and where your customers are located, you may need to collect different types of taxes. In this article, we’ll give you a rundown of the different types of taxes that may apply to your business and how to set them up in Shopify.
There are two main types of taxes that you may need to collect: sales tax and value-added tax (VAT).
Sales tax is a tax on the sale of goods and services. It’s usually collected by the seller at the time of purchase. The amount of sales tax that you charge will depend on the laws in your jurisdiction.
Value-added tax (VAT) is a tax on the value that is added to goods and services at each stage of production or distribution. VAT is usually collected by the seller at the time of purchase. The amount of VAT that you charge will depend on the laws in your jurisdiction.
To set up taxes in Shopify, go to Settings > Taxes. From here, you can add and edit your tax settings. You can also add multiple taxes, which is helpful if you need to collect both sales tax and VAT.
To add a new tax:
1. Click Add Tax Rate. 2. Enter the name of the tax, such as “Sales Tax” or “VAT”. 3. Enter the rate of the tax, such as “10%”. 4. Select whether the tax is charged on shipping rates.
5. Select whether the tax is included in product prices or not. 6. Select which countries or regions the tax should be applied to. If you’re not sure, leave this setting as “All countries”. 7. Click Save Tax Rate.
That’s it! You’ve now set up taxes in Shopify.
If you have any further questions about setting up taxes in Shopify, feel free to reach out to our support team.