Handling sales tax
It's easy to collect, record and report your sales taxes. You can be set up and ready to go in just a few minutes.
Even collecting your EU VAT is easily sorted with our up-to-date tax settings.
On this page
Here's how to ensure you're set up correctly:
- Go to your dashboard and click on Settings, then Tax
- On the Tax Settings page, flick on Enable Tax, then enter or update and save your address
- Choose whether you would like the price to include tax, or if it’s an amount that you would like to be added at the checkout
- Decide whether you will allow business sales or not
Business sales allow you to configure specific tax rates for businesses within the tax setting on a country basis
When enabled, an additional field for the business number is displayed during checkout and if this field is completed by the buyer, then business tax rates are applied to the order
- Add the regions and countries where you need to charge tax. We'll add some defaults for you based upon your location.
- Click on Save when you're done
- When we pay you, we'll take out the transaction fee and pass the rest, including taxes, onto you
- Any taxes charged on a sale are visible on the order page for each item, and also in the Orders tab: You'll see a column there displaying the taxes.
- You can change the date range if you'd just like to see orders for a certain period here
If you are on the Pro Plan, you can automatically send your customers a tax invoice after each sale.
Business sales tax
Allowing ‘business sales’ enables you to set special business tax rates that apply when a company purchases from your store. If the tax number field is completed during checkout then business tax rates are applied.
Your ‘business tax rates’ will need to be configured for all countries in your tax settings. By default, these are set at 0%, so be sure to update the rates in order to not lose tax due on orders.
To update your business tax rates:
- Navigate to Settings / Tax
- Select a ‘Tax Region’
- Select a ‘Country’
- Then select the ‘Businesses’ tab in the top right corner
You will need to update the settings for each country (in each region).
While we help you collect sales tax, it's up to you as a business owner to pay the applicable taxes, depending on your location
- You can see total tax amounts by going to your Orders tab in your Dashboard
- Set your date range, and click on Search
- Click on Export and you'll have a CSV of all the numbers you need
- You'll see taxes over toward the right of the spreadsheet
You'll also see that you can sort the numbers according to the region.
For example, if you're reporting to VATMOSS then you'll be able to easily pull out what you need for reporting in Europe.
You can easily import this data into your accounting software, email it to your accountant or grab the numbers manually if you like.
For reporting to VATMOSS, you'll need to sort the numbers according to the European region, which you'll find a column for over to the right of your export. You can also block certain countries and zones.
EU VAT Reporting
Our tax feature helps with your EU VAT reporting. You can:
- Identify the customer location using a number of data points
- Apply the correct VAT rate across the 28 EU states
- Collect and store the evidence to verify the customer’s location
- Export your order list with the EU VAT liability for each sale for quarterly EU MOSS returns
Identifying the customer’s location during the checkout process
We've kept the checkout process as streamlined as possible so you don’t lose out on any sales. However, we have made some changes to accommodate the new EU VAT rules.
The EU rule changes require businesses to capture and record a minimum of two non-contradictory pieces of evidence to identify the place where the consumer is established (their permanent address or normally resides).
Turning on EU VAT Reporting means that customers purchasing a digital product will now be asked for their billing address.
The system will also automatically capture the IP address and the location of the credit card issuer. It will also apply the relevant VAT rate to estimate the VAT liable on that sale.
The country's evidence for a sale will be recorded and stored for 10 years in accordance with the EU VAT rules.
Exporting orders including EU VAT liability
Any exports of your order list now include additional columns of data relating to the EU VAT liability for each sale. We don't submit your returns and pay your tax, but this export can be used in preparing for submitting your quarterly VAT returns using VAT MOSS.
A quick refresher about VAT MOSS
To ‘help’ lessen the admin the EU has implemented an online portal called Mini One-Stop Shop (MOSS) scheme as an alternative to registering with each of the EU member states separately.
If based in the EU, you register with your country’s MOSS online service. If outside of the EU you can register for the UK’s non-union VAT MOSS online service.
You submit your quarterly returns to the MOSS, and this takes care of sending what is owed to the appropriate countries.
Additional information on EU VAT rule changes
This is the comprehensive explanatory notes from the EU commission on the EU VAT changes from 2015.