Setting up taxes

As an online merchant, you may need to collect taxes (sales taxes in the US, VAT in Europe and Japan, GST in Canada, etc) and then periodically forward the collected tax amounts to appropriate tax authorities.

What taxes should I set up

Taxation rules differ depending on the country where the online business is based — tax rates can depend on types of products, your business location, consumers’ location, and more. For example, merchants that sell e-goods to customers in the EU, should charge taxes on digital products.

Check with your local tax experts whether you sell taxable goods and what are the tax rates associated with them before moving forward with online sales.

How to configure taxes

If you are selling within the USA or the EU, please read the article US sales tax in Ecwid or EU taxes in Ecwid.

Once you know where your business is responsible for charging taxes, make sure to configure your Ecwid store to meet your local tax laws.

There are two ways to set up taxes in an Ecwid store:

  • Automatic taxes. They are available for merchants in the USA, the EU, Canada, Australia and New Zealand. Automatic taxes provide up-to-date standard rates across the store and can be enabled in one button click.
  • Manual taxes. If automatic taxes are not available for your country or you sell differently taxed products, you can configure taxes manually.

If you are based in the USA, the EU, Canada, Australia and New Zealand, you can enable automatic calculation of taxes in your store. As the result, the up-to-date standard tax rates of your country will apply to all products in your Ecwid store.

To set up automatic taxes:

  1. Enter your actual company address in the Ecwid admin, Settings → General. This address is needed to calculate and apply the right tax rate to orders at checkout.
  2. Enable automatic taxes in Settings → Taxes:

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Once enabled, the automatic taxes will determine a precise tax rate at checkout depending on where you and your customer are located and will apply tax to each order.

How to get a tax report

Different countries have unique tax reporting requirements. You should consult your local tax professionals on how and how often you should file and remit the collected taxes to government.

If you use an accounting software when working on tax reports, you can import there your store’s order data, including the collected taxes.

For automatic import of order data, you can connect your store with Quickbooks, Xero or Freshbooks accounting software (integration with these services is available in form of apps from Ecwid app market).

Otherwise you can export the order data from your store to CSV file, then import the downloaded CSV file into your accounting software or send it to accountant that handles it for you. You can also open the file in a spreadsheet and summarize the numbers manually if you like.

If necessary, you can also print out invoices for your records or download them if the form of a PDF file.

With automatic taxes, US merchants can also get sales tax report and file taxes via the TaxJar app.
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