Tax calculation options in Umbraco Commerce.
Umbraco Commerce offers two different tax calculation method configurations for calculating an order's tax amounts.
This option allows you to define a single fixed tax rate to apply for all products of the same type shipped to the same country. This option is useful for countries that have a fixed tax rate (the norm in EU countries).
This option allows you to dynamically calculate the tax obligations of an order by using third-party calculation platforms. This complex option is useful for countries with different tax rates for different product types or regions within the country (the norm in the US).
Calculated Rate Taxes in Umbraco Commerce.
This option allows you to dynamically calculate the tax obligations of an order by using third-party calculation platforms. This complex option is useful for countries with different tax rates for different product types or regions within the country (the norm in the US).
When using calculated rate taxes, taxes are calculated as a single price adjustment against the order total price and will not offer any breakdown.
Calculated tax rates are configured using Tax Calculation Methods. A tax calculation method provides a connection to a third-party calculation service via a Sales Tax Provider. The sales tax provider passes the order details to the calculation service and returns the tax amount to be applied to the order.
Before you can configure a tax calculation method, you will need to install at least one sales tax provider.
A TaxJar example is provided on GitHub at https://github.com/umbraco/Umbraco.Commerce.SalesTaxProviders.TaxJar
Go to Settings > Stores > {Your Store} > Taxes > Tax Calculation Methods.
Click on the Create Tax Calculation Method button.
Choose a Sales Tax Provider from the list.
Enter the Tax Calculation Method Name and Alias.
Configure the Tax Calculation Method settings.
Click Save.
Tax calculation methods are assigned to a Country entity. This allows you to define different tax calculation methods for different countries. The tax calculation method assigned to an order's shipping country will be used to calculate the tax amount for the order.
When calculating taxes, you may need to provide product tax codes to the calculation service. Tax codes are used to identify the type of product being sold and used by the calculation service to determine the correct tax rate. To assign a tax code to a product, you can use a Tax Class with a code defined for the given country.
See Tax Classes Configuration for more information on how to configure tax classes.
It is possible to configure a store to accept prices including tax. When using tax calculation methods it is not possible to enable this feature. A warning will show if you try to do so and a tax calculation method is already defined on a stores country.
Fixed Rate Taxes in Umbraco Commerce.
Fixed-rate taxes allow you to dynamically calculate the tax obligations of an order by using third-party calculation platforms. This complex option is useful for countries with different tax rates for different product types or regions within the country (the norm in the US).
When using fixed-rate taxes, taxes will be calculated for each price object in the order.
Fixed-rate taxes are defined using Tax Classes. A tax class is a classification for a specific type of product and can be configured to have different tax rates for different countries.
Go to Settings > Stores > {Your Store} > Taxes > Tax Classes.
Click on the Create Tax Class button.
Enter the Tax Class Name, Alias, Default Tax Rate and optional Default Tax Code.
Optionally, define any country-specific tax rates by toggling the checkbox in the Country Tax Classes for the country.
Click the Edit Tax Class button to define the country-specific tax rate/tax code.
Click Save.
There are two ways to assign a tax class to a product:
In the store settings editor, set the Default Tax Class for the store. This will be the default tax class for all products in the store.
In the product Document Type, define a Store Entity Picker property configured for the Tax Class entity type, with the property alias taxClass. In the products content editor, set the Tax Class for the product. This will override the store default tax class for the product.
