The following instructions take you through the basic tax configuration for your Commerce instance. Before setting up your taxes, make sure that you are familiar with the tax requirements of your locale. Then, complete the tax configuration according to your requirements.
Admin permissions can be set to restrict access to tax resources, based on the business need to know. To create an Admin role with access to tax settings, choose both the Sales/Tax and System/Tax resources. If setting up a website for a region that differs from your default shipping point of origin, you must also allow access to the System/Shipping resources for the role. The shipping settings determine the store tax rate that is used for catalog prices.
On the Admin sidebar, go to Stores > Settings > Configuration.
For a multisite configuration, set Store View to the website and store that is the target of the configuration.
In the left panel, expand Sales and choose Tax.
Complete the following configuration settings.
If necessary, clear the Use system value checkbox of any settings that are dimmed.
Expand the Tax Classes section.
None
and Taxable Goods
None
and Taxable Goods
None
and Taxable Goods
Retail Customer
and Wholesale Customer
When complete, click Save Config.
Expand the Calculation Settings section.
Set Tax Calculation Method Based On to one of the following:
Unit Price
- The price of each productRow Total
- The total of the line item in the order, less discountsTotal
- The order totalSet Tax Calculation Based On to one of the following:
Shipping Address
- The address where the order is to be shippedBilling Address
- The billing address of the customer or companyShipping Origin
- The address that is specified as the point of origin for your storeSet Catalog Prices to Excluding Tax
or Including Tax
.
Set Shipping Prices to Excluding Tax
or Including Tax
.
Set Apply Customer Tax to one of the following to determine whether tax is applied to the original or discounted price: After Discount
or Before Discount
Set Apply Discount on Prices to one of the following to determine if discounts include or exclude tax: Excluding Tax
or Including Tax
Set Apply Tax On to Custom price if available
or Original price only
.
Set Enable Cross-Border Trade to one of the following:
Yes
- Use consistent pricing across different tax rates. If the catalog price includes tax, choose this setting to fix the price regardless of the customer’s tax rate.No
- Vary the price by tax rate.If cross-border trade is enabled, the profit margin changes by tax rate. Profit is determined by the formula (Revenue - CustomerVAT - CostOfGoodsSold
). To enable cross-border trade, prices must be set to include tax.
Expand the Default Tax Destination Calculation section.
Specify the Default Country for tax calculations.
If applicable, specify the Default State for tax calculations.
If applicable, specify the Default Post Code for tax calculations.
When complete, click Save Config.
Some combinations of settings related to a price display that both include and exclude tax can be confusing to the customer. To avoid triggering a warning message, see the recommended settings.
Expand the Price Display Settings section.
Set Display Product Prices in Catalog to one of the following:
Excluding Tax
- Catalog prices that appear in the storefront do not include tax.Including Tax
- Catalog prices in the storefront include tax only if a tax rule matches the tax origin, or if the customer’s address matches the tax rule. This might happen after a customer creates an account, logs in, or uses the Estimate Tax and Shipping tool in the cart.Including and Excluding Tax
- Catalog prices that appear in the storefront are displayed both with, and without tax.Set Display Shipping Prices to Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
When complete, click Save Config.
Expand the Shopping Cart Display Settings section.
For each of the following settings, choose how you want taxes and prices to appear in the cart, according to the requirements of your store and locale:
Set Display Prices to Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
Set Display Subtotal to Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
Set Display Shipping Amount to Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
(Adobe Commerce only) Set Display Gift Wrapping Prices to
Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
(Adobe Commerce only) Set Display Printed Card Prices to
Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
Set the following display options to either Yes
or No
, according to your needs:
When complete, click Save Config.
Expand the Orders, Invoices, Credit Memos Display Settings section.
Specify how prices and taxes appear in orders, invoices, and credit memos:
Set Display Prices to Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
Set Display Subtotal to Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
Set Display Shipping Amount to Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
(Adobe Commerce only) Set Display Gift Wrapping Prices to
Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
(Adobe Commerce only) Set Display Printed Card Prices to
Excluding Tax
, Including Tax
, or Including and Excluding Tax
.
Set the following display options to either to Yes
or No
, according to your requirements:
When complete, click Save Config.
Expand the Fixed Product Taxes section.
Set Enable FPT to either to Yes
or No
, according to your requirements.
If FPT is enabled, specify FPT display options:
Display Prices in Product Lists
Display Price On Product view Page
Display Prices in Sales Modules
Display Prices in Emails
Including FPT Only
- Displayed prices include fixed product taxes. The FPT amount is not displayed separately.
Including FPT and FPT description
- Displayed prices include fixed product taxes. The FPT amount is displayed separately.
Excluding FPT. Including FPT description and final price
- Displayed prices do not include fixed product taxes. The FPT amount is displayed separately.
Excluding FPT
- Displayed prices do not include fixed product taxes. The FPT amount is not displayed separately.
Set Apply Discounts to FPT to Yes
or No
, according to your requirements.
Set FPT Tax Configuration to determine how FPT is calculated.
Not Taxed
- Select this option if your taxing jurisdiction does not tax FPT. (For example, California.)Taxed
- Select this option if your taxing jurisdiction does tax FPT. (For example, Canada.)Loaded and Displayed with Tax
- Click this option if FPT is added to the order total before applying tax. (For example, EU countries.)Set Include FPT in Subtotal to Yes
or No
, according to your requirements.
When complete, click Save Config.
Cross-border trade (also referred to as price consistency) supports European Union (EU) and other merchants who want to maintain consistent prices for customers whose tax rates are different from the store tax rate.
Merchants operating across regions and geographies can display a single price by including the tax in the price of the product. Pricing is clean and uncluttered regardless of tax structures and rates that vary from country to country. These settings require that a tax calculation extension is installed from the Marketplace, such as Vertex Cloud.
When cross-border trade is enabled, your profit margin changes by tax rate. Profit is determined by the formula:
Revenue - CustomerVAT - CostOfGoodsSold
To enable cross-border price consistency:
On the Admin sidebar, go to Stores > Settings > Configuration.
For a multisite configuration, set Store View to the website and store that is the target of the configuration.
In the left panel, expand Sales and choose Tax.
Expand the Calculation Settings section.
Set Catalog Prices to Including Tax
.
To enable cross-border price consistency, set Enable Cross Border Trade to Yes
.
When complete, click Save Config.