How to Configure WooCommerce Taxes

WooCommerce Taxes configuration is not much complicated. You just need to learn it in the right way from a good source and apply it to your store. WooCommerce provides a easy to understand options for setting it up for your online store. We hope this tutorial will make the settings easier.

Follow the steps carefully till the end of this article.

Enable WooCommerce Taxes

You have to enable the WooCommerce Taxes to set up the taxes. To enable it;

  • Go to the Dashboard, then click WooCommerce > Settings > General.
  • Tick the Enable Taxes
  • Now save the changes

Enable Taxes

Tax tab should appear.

Tax tab

Tax Options

Now if you go to the Tax tab and click on it, the Tax tab looks like the screenshot below:

Tax Option

Below we discuss all options step by step.

Prices entered with tax – This alternative is may be the most vital when overseeing charges in your store, as it decides how you include item costs later on.

  • “Yes, I will enter prices inclusive of tax” – this option implies that all catalog costs are information utilizing your store’s base tax rate.
  • “No, I will enter prices exclusive of tax” – this imply that your inventory costs should be tax exclusive.

Price entered with tax

Calculate tax based on –  this will select address to calculate taxes.

  • Customer shipping address – you can change the default customer address from General Settings tab.
  • Customer billing address.
  • Shop address – this settings will calculate the taxes according to shop location instead of the customer.

Tax based on location

Shipping tax class – this setting determines how you can define Shipping Tax Class in your store. In most cases, shipping tax class is based on the items in the cart. That means if your customer adds a product it falls under a different tax rate, the shipping tax will also be calculated at that same rate.

Shipping tax class

Rounding – You can put tick on the checkbox if you want to round taxes on the checkout page at the subtotal level if not the default round per line will be applied.

Round tax

Additional tax classes

In addition to the default tax classes you can create additional tax classes based on your tax requirements. WooCommerce has already set two additional tax classes – Reduced Rate and Zero Rate.

Additional tax classes

To create a new tax class, enter the names in the text field.

Adding new tax classes

Once you will create and save the new tax classes, they will be appeared as a tab on the top of the screen.

Tax class tab

To set the rate of the newly created tax class, just click on the name and enter all required data.

Settings rates

Display Prices in the Shop – This option will determines how costs are shown in your shop/catalog.

Display Prices During Cart and Checkout – This option will determines how costs are shown in your truck and checkout pages – it works free of your list costs.

Display prices

Price Display Suffix – It will allows you to change display to: Prices include % tax/VAT or anything suitable for your store.

Price display suffix

Display tax totals – This will decides if multiple taxes get displayed as one total during checkout, or as an itemized list of taxes.

Display tax totals

Now click on Save changes button to save.

Tax rate configuration

You can configure tax rates under Standard rates class by default. To enter a new rate, click Insert row.

Settings up tax rates

We’ll explain to you what each of these options means and how details are entered into it.

Country code – In this field enter a two-digit country code, for example: The US for the United States. If you keep the field empty the tax rate applies to all the countries.

State code – In this field enter a two digit state code, for example: NY for Newyork. If you keep it empty it applies to all states within the country.

Postcode / ZIP – Here you have to enter Postcode or zip code of the area and separate multiple values with a semicolon (;). If you left it blank it applies to all area.

City- In this field enter the name of the city. If you keep it blank it apply to all cities. If you are trying to enter multiple cities separate them with a semicolon (;).

Rate % – Enter the tax rate you want to apply. Don’t forget to put percentage (%) sign with the value.

Tax name – Enter a name for the tax rate.

Priority – Here you can choose a priority for the tax rate. Use only one matching rate per priority. If you want to define multiple tax rates for a single area you need to specify a different priority per rate.

Compound – Choose whether this is a compound rate or not by tick marking the checkbox. It is applied on top of other tax rates.

Shipping – If you want to apply the tax rate as well you can tick on the checkbox.

In  order to set up tax rates there are a few more options you should get acquainted with.

Deleting Tax Rates – To delete tax rates just go to: WooCommerce > Settings > Tax > Standard, Reduced Rate, Zero Rate

  • Select the incorrect lines by clicking on them. You will get Yellow highlight portion.
  • Select Remove Selected Rows. This will remove the highlighted rows.
  • Save changes.

Standard rates

If you want to delete all tax rates at a time, just go to WooCommerce > System Status > Tools and click on the ‘Delete all WooCommerce tax rates’ option.

WooCommerce standard tax rates remove all

Import and export of tax rates – You can import or export your own configuration of tax rates. Buttons of Import CSV and Export CSV are as the screen shot below:

WooCommerce tax import export

View Tax Reports – You can find the tax reporting in Reports > Taxes > Taxes by Date > Year. This report will give you a chance to see Tax for the year.

Yearly tax reports

To get different report with taxes separately go to Reports > Taxes > Taxes by code..

Taxes by last month

Apply different tax rates on the basis of customer role

To apply different tax rates, add this code at the end of your functions.php file which located in wp-content/themes/your-theme-name/:

function wc_diff_rate_for_user( $tax_class, $product ) {
if ( is_user_logged_in() &&current_user_can( ‘administrator’ ) ) {
$tax_class = ‘Zero Rate’;
}
return $tax_class;
}
add_filter( ‘woocommerce_product_tax_class’, ‘wc_diff_rate_for_user’, 1, 2 );
In the above example, we’ve used only Zero Rate tax class to administrators.
If you want to change current user from Administrator to Shop manager, then change current_user_can( ‘administrator’ ) to current_user_can( ‘shop-manager’ ) to apply it.

Related Article: Setting up Taxes in WooCommerce

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