Orders, invoices, credit memos, and display settings

OptionRecommended setting
Display PricesExcluding Tax
Display SubtotalExcluding Tax
Display Shipping AmountExcluding Tax
Include Tax in Grand TotalYes
Display Full Tax SummaryYes
Display Zero Tax SubtotalYes

Fixed product taxes (FPT)

OptionRecommended setting
Enable FPTNo, except in California.

UK tax configuration

These recommended settings can be used for most tax configurations for stores within the United Kingdom.

UK B2C tax configuration

Tax optionRecommendation
Load catalog pricesExcluding tax
FPTYes, including FPT and description
Tax based onShipping Address
Tax CalculationOn total
Tax shipping?Yes
Apply DiscountBefore tax, discount on prices, including tax.
CommentFor merchants marking up supplier invoices (including VAT).

U.K. B2B tax configuration

Tax optionRecommendation
Load catalog pricesExcluding tax
FPTYes, including FPT and description
Tax based onShipping Address
Tax CalculationOn item
Tax shipping?Yes
Apply DiscountBefore tax, discount on prices, including tax.
CommentFor B2B merchants to provide simpler VAT supply chain considerations. Tax calculation on row is also valid; however, check with your taxing jurisdiction. Setup assumes that a merchant is in the supply chain and that goods sold are used by other vendors for VAT rebates and so on. This definition makes it easy to discern tax by item for faster rebate generation.

Note: Some jurisdictions require different rounding strategies not currently supported by Commerce, and that not all jurisdictions allow item or row level tax.

Canada tax configuration

IMPORTANT
Merchants that are in a GST/PST province (Montreal) should create one tax rule and show a combined tax amount. Be sure to consult a qualified tax authority if you have any questions.
Tax optionRecommendation
Load catalog pricesExcluding tax
FPTYes, including FPT, description, and apply tax to FPT.
Tax based onShipping origin
Tax CalculationOn total
Tax shipping?Yes
Apply DiscountBefore tax

The following example shows how to set up GST tax rates for Canada and PST tax rates for Saskatchewan, with tax rules that calculate and display the two tax rates. This information outlines an example configuration; be sure to verify the correct tax rates and rules for your tax jurisdictions. When setting up taxes, set the store scope to apply the configuration to all applicable stores and websites.

  • Fixed product tax is included for relevant goods as a product attribute.
  • In Quebec, PST is referred to as TVQ. If you want to set up a rate for Quebec, make sure to use TVQ as the identifier.

Step 1: Complete tax calculation settings

  1. On the Admin sidebar, go to Stores > Settings > Configuration.

  2. For a multisite configuration, set Store View to the website and store that is the target of the configuration.

  3. In the left panel, expand Sales and choose Tax.

  4. Click to expand each section on the page and complete the following settings:

Tax Calculation Settings

FieldRecommended setting
Tax Calculation Method Based OnTotal
Tax Calculation Based OnShipping Address
Catalog PricesExcluding Tax
Shipping PricesExcluding Tax
Apply Customer TaxAfter Discount
Apply Discount on PricesExcluding Tax
Apply Tax OnCustom Price (if available)

Tax Classes

FieldRecommended setting
Tax Class for ShippingShipping (shipping is taxed)

Default Tax Destination Calculation

FieldRecommended setting
Default CountryCanada
Default State(as appropriate)
Default Postal Code* (asterisk)

Shopping Cart Display Settings

FieldRecommended setting
Include Tax in Grand TotalYes
Display Full Tax SummaryYes
Display Zero in Tax SubtotalYes

Fixed Product Taxes

FieldRecommended setting
Enable FPTYes
All FPT display settingsIncluding FPT and FPT description
Apply Discounts to FPTNo
Apply Tax to FPTYes
Include FPT in SubtotalNo

Step 2: Set up Canadian Goods & Services Tax (GST)

To print the GST number on invoices and other sales documents, include it in the name of the applicable tax rates. The GST appears as part of the GST amount on any order summary.

Manage Tax Zones & Rates

FieldRecommended setting
Tax IdentifierCanada-GST
CountryCanada
State* (asterisk)
Zip/Post is RangeNo
Zip/Post Code* (asterisk)
Rate Percent5.0000

Step 3: Set up Canadian Provincial Sales Tax (PST)

Set up another tax rate for the applicable province.

Tax Rate Information

FieldRecommended setting
Tax IdentifierCanada-SK-PST
CountryCanada
StateSaskatchewan
Zip/Post is RangeNo
Zip/Post Code* (asterisk)
Rate Percent5.0000

Step 4: Create a GST tax rule

To avoid compounding the tax and to correctly display the calculated tax as separate line items for GST and PST, set different priorities for each rule and select the Calculate off subtotal only checkbox. Each tax appears as a separate line item, but the tax amounts are not compounded.

Tax Rule Information

FieldRecommended setting
NameRetail-Canada-GST
Customer Tax ClassRetail Customer
Product Tax ClassTaxable GoodsShipping
Tax RateCanada-GST
Priority0
Calculate off subtotal onlySelect this checkbox.
Sort Order0

Step 5: Create a PST Tax Rule for Saskatchewan

For this tax rule, make sure to set the priority to 0 and select the Calculate off subtotal only checkbox. Each tax appears as a separate line item, but the tax amounts are not compounded.

Tax Rule Information

FieldRecommended setting
NameRetail-Canada-PST
Customer Tax ClassRetail Customer
Product Tax ClassTaxable GoodsShipping
Tax RateCanada-SK-PT
Priority1
Calculate off subtotal onlySelect this checkbox.
Sort Order0

Step 6: Save and test the results

  1. When complete, click Save Config.

  2. Return to your storefront and create a sample order to test the results.

EU tax configuration

The following example depicts a store based in France that sells 100k+ Euros in France and 100k+ Euros in Germany.

  • Tax calculations are managed at the website level.
  • Currency conversion and tax display options are controlled individually at the store view level (Select the Use Website checkbox to override the default).
  • By setting the default tax country, you can dynamically show the correct tax for the jurisdiction.
  • Fixed product tax is included for relevant goods as a product attribute.
  • It might be necessary to edit the catalog to ensure that it shows up in the correct category/website/store view.

Step 1: Create three product tax classes

For this example, it is assumed that multiple VAT-Reduced product tax classes are not needed.

  1. Create a VAT-Standard product tax class.

  2. Create a VAT-Reduced product tax class.

  3. Create a VAT-Free product tax class.

Step 2: Create tax rates for France and Germany

Create the following tax rates:

Tax ratesSettings
France-StandardVATCountry: France
State/Region: *
ZIP/Postal Code: *
Rate: 20%
France-ReducedVATCountry: France
State/Region: *
ZIP/Postal Code: *
Rate: 5%
Germany-StandardVATCountry: Germany
State/Region: *
ZIP/Postal Code: * Rate: 19%
Germany-ReducedVATCountry: Germany
State/Region: *
ZIP/Postal Code: *
Rate: 7%

Step 3: Set up the tax rules

Create the following tax rules:

Tax rulesSettings
Retail-France-StandardVATCustomer Class: Retail Customer
Tax Class: VAT-Standard
Tax Rate: France-StandardVAT
Priority: 0
Sort Order: 0
Retail-France-ReducedVATCustomer Class: Retail Customer
Tax Class: VAT Reduced
Tax Rate: France-ReducedVAT
Priority: 0
Sort Order: 0
Retail-Germany-StandardVATCustomer Class: Retail Customer
Tax Class: VAT-Standard
Tax Rate: Germany-StandardVAT
Priority: 0
Sort Order: 0
Retail-Germany-ReducedVATCustomer Class: Retail Customer
Tax Class: VAT-Reduced
Tax Rate: Germany-ReducedVAT
Priority: 0
Sort Order: 0

Step 4: Set up a store view for Germany

  1. On the Admin sidebar, go to Stores > Settings > All Stores.

  2. Under the default website, create a store view for Germany.

  3. Next, do the following:

    • On the Admin sidebar, go to Stores > Settings > Configuration.

    • In the upper-left corner, set Default Config to the French store.

    • On the General page, expand Expansion selector the Countries Options section, and set the default country to France.

    • Complete the locale options as needed.

  4. In the upper-left corner, choose the German Store View.

  5. On the General page, expand Expansion selector Countries Options and set the default country to Germany.

  6. Complete the locale options as needed.

Step 5: Configure tax settings for France

Complete the following general tax settings:

FieldRecommended setting
Tax Classes
Tax Class for ShippingShipping (shipping is taxed)
Calculation Settings
Tax Calculation Method Based OnTotal
Tax Calculation Based OnShipping Address
Catalog PricesIncluding Tax
Shipping PricesIncluding Tax
Apply Customer TaxAfter Discount
Apply Discount on PricesIncluding Tax
Apply Tax OnCustom Price if available
Default Tax Destination Calculation
Default CountryFrance
Default State
Default Postal Code* (asterisk)
Fixed Product taxes
Enable FPTYes
All FPT Display SettingsIncluding FPT and FPT description
Apply Discounts to FPTNo
Apply Tax to FPTYes
Include FPT in SubtotalYes

Step 6: Configure tax settings for Germany

  1. On the Admin sidebar, go to Stores > Settings > Configuration.

  2. In the upper-right corner, set Store View to the view to the German store and click OK to confirm.

  3. In the left panel, expand Sales and choose Tax.

  4. In the Default Tax Destination Calculation section, do the following:

    • Clear the Use Website checkbox after each field,

    • To match your site’s Shipping Settings point of origin, update the following values:

      • Default Country
      • Default State
      • Default Post Code

      This setting ensures that tax is calculated correctly when product prices include tax.

      Default Tax Destination Calculation

  5. When complete, click Save Config.

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