Tax settings

This article contains information regarding the tax settings of your shop. Note that you usually don't need to edit the tax settings. Your provider should ensure that the tax classes, tax areas, and tax rates are always up-to-date. Keep in mind that all tabs in the tax settings are connected. Any changes you make might also affect the other tabs. Therefore, it is recommended to start at the tab Tax model.

Be sure you are well informed about the tax regulations in your shop country before making any changes to your shop’s tax settings. For further information, refer to official resources provided by your shop country or consider consulting a tax advisor.

Tax model

On the tab Tax model, you can take care of the basic settings concerning your shop's tax model. If your shop is in the European Union (EU), you can also make the respective settings for the taxation of your foreign sales within the EU here. For further information, refer to the sections EU VAT Reform: Delivery thresholds and the One-Stop Shop, EU sales taxation, and Exceptions for EU countries.

Follow the steps to make changes to the Tax model:

1. In the sidebar of the administration, navigate to Settings → Taxes.
   The tab Tax model is the default/first tab.
2. In the drop-down menu Price information in the shop, select how you want the price information in your shop to be displayed. You have the following options:
   
   • Prices incl. VAT (gross)
     Under prices in the administration, you can also decide whether you want to enter net or gross prices in the administration area.
   • Prices excl. VAT (net)
     Under prices in the administration, you can also decide whether you want to enter net or gross prices in the administration area.
   • Exempted from VAT
     Add an info text or keep the suggested wording in the text field VAT info stated in shop, basket, emails, and order documents to inform your customers about the VAT exemption.
     
     Note that not all shops can use this option. Before choosing this option, check whether it complies with the tax laws in your country.
3. Select Save.

EU VAT Reform: Delivery thresholds and the One-Stop Shop

Info

Note that the following part only applies to merchants in the European Union (EU).

On July 1, 2021, a VAT reform for EU-wide online trade came into force. This reform establishes a general aggregated threshold for all foreign inner-EU sales. If the threshold is exceeded, the VAT for all inner-EU transactions must be processed according to the regulations and tax rates of the destination countries. If the threshold is not exceeded, the sales are taxed as usual and by default at the local national tax rate that applies to the merchant's shop country.

To facilitate VAT declarations and payments, the respective country of residence will provide a so-called "One-Stop Shop" (OSS) model for merchants, an online portal to centralise the procedure. Thus, merchants only need to register once for all inner-EU sales and can continue to pay all VAT taxes centrally in their country of residence without having to register in other EU countries.

Info

For further information about the correct taxation for your shop, individual advice, sales into EU-destinations by non-EU-merchants, and details e.g. with regards to the handling of marketplace/fulfilment portals like the Amazon PAN EU Programme, refer to the articles provided by the European Commission or consider consulting your tax advisor.

EU sales taxation

To comply with the current regulations for foreign EU sales, merchants in the European Union (EU) can learn more about how to set the taxation for their foreign EU sales in the following section.

Follow the steps below to edit the taxation of your EU foreign sales:

1. In the sidebar of the administration, navigate to Settings → Taxes.
2. Select the applicable option:
   
   • Taxation by shop country
     You can select this option if the net total of your foreign sales within the EU is below the stated threshold.
   • Taxation by destination country
     Select this option if the net total of your foreign sales within the EU is more than the stated threshold. With this option, all EU wide sales through your shop are taxed according to the tax rates of your sales destinations. For further information about the tax settings for individual products, refer to the article Managing products and the section Exceptions for EU countries.
3. Select Save.

On the tab Tax matrix, you can find the following overview of the net total of your current sales compared to the limit value. For this overview, only foreign sales within the EU are considered.

Tax matrix

On the tab Tax matrix, there is a table that displays the tax areas and tax classes you've either set on the other tabs or that are the default settings for your shop country. The default tax area/class is marked with an asterisk (*). To edit the tax areas, refer to the section Tax areas. To edit the tax classes, refer to the section Tax classes.

Note that you can not customise the tax matrix while Taxation by destination country is selected. If you want to customise the tax matrix, you'll need to change the setting to Taxation by shop country first. To do so, reset the tax matrix to the default settings.

Follow the steps below to edit the tax rates for tax classes:

1. In the sidebar of the administration, navigate to Settings → Taxes, and open the tab Tax matrix.
2. Select Customise.
3. Read and consider the warning message:

   Your provider ensures that the tax classes, tax areas, and tax rates are always up-to-date. If you continue with this step, it is your responsibility to maintain and update the data, as it will no longer be updated automatically.

   Note that your shop will be temporarily unavailable while you edit the tax matrix.

4. Confirm your choice by selecting Customise again.
   
5. Edit the tax rates.
   Note that you can only add up to two decimal places.
6. Select Save.

To undo all of your changes, select Reset to default settings. Confirm your choice by selecting Reset to default settings again.

Tax areas

On the tab Tax areas, you can view all available tax areas. Select Assignment of countries to see which countries are assigned to which tax area. When an order is placed, your shop automatically determines the tax area of the customer based on the delivery address.

Caution

Note that the settings on the tab Tax areas usually cannot be changed by you. If you want to edit them, you'll need to customise the Tax matrix first and accept the warning message.

Follow the steps below to add a tax area:

1. In the sidebar of the administration, navigate to Settings → Taxes, and open the tab Tax areas.
2. Select + Add.
3. Add the name of the tax area in the text field.
4. Select Add.
   Your changes are saved automatically.

To delete a tax area, activate the checkbox, select , and confirm your choice by selecting Delete. You can't delete a tax area that is set as the default selection or that is the default for all additional countries. To assign countries to a different tax area, refer to the section Assignment of countries.

Furthermore, when adding a new product you can decide from which tax area you want to choose the tax rates. You can find the tax rates of the default tax area on the product page, in the section Price, visible in the drop-down menu Tax class.

Follow the steps below to change the default tax area:

1. In the sidebar of the administration, navigate to Settings → Taxes, and open the tab Tax areas.
2. Choose the Default selection for the tax area you want to set as default.
3. Select Save.

Assignment of countries

Note that the settings on the tab Tax areas usually cannot be changed by you. If you want to edit them, you'll need to customise the Tax matrix first and accept the warning message.

Follow the steps below to edit the Assignment of countries:

1. In the sidebar of the administration, navigate to Settings → Taxes, and open the tab Tax areas.
2. Select Assignment of countries.
   
   The listed countries depend on your shop country and your settings under Settings → Internationalisation. You can also add multiple exceptions for each country. For some regions, it is necessary because their tax regulations differ compared to the settings of the country. You can't add an exception for the Default for all additional countries.
3. In the drop-down menu Tax area, select a tax area to apply for each country. The available options depend on the tax areas you may have added previously on the tab Tax areas.
4. Select Save.

Tax classes

On the tab Tax classes, you can view all available tax classes. You can set the tax class for each product in the drop-down menu Tax class on the product page in the section Price.

Note that the settings on the tab Tax classes usually cannot be changed by you. If you want to edit them, you'll need to customise the Tax matrix first and accept the warning message.

Addition/removal of tax classes

Follow the steps below to add a tax class:

1. In the sidebar of the administration, navigate to Settings → Taxes, and open the tab Tax classes.
2. Select + Add.
3. Add the name of the tax class in the text field.
4. Select Add.
   Your changes are saved automatically.

To delete a tax class, activate the checkbox, select , and confirm your choice by selecting Delete. You can't delete a tax class that is set as the default selection.

Caution

Note that you can no longer change the content of orders that refer to a deleted tax class.

Default tax class

Furthermore, you can decide which tax class should be the default selection when you add a new product. The respective tax class will be selected automatically. To assign a different tax class, you'll need to select it in the drop-down menu Tax class on the product page in the section Price.

Follow the steps below to change the default tax class:

1. In the sidebar of the administration, navigate to Settings → Taxes, and open the tab Tax classes.
2. Select Default selection for the tax class you want to use as the default.
3. Select Save.

Exceptions for EU countries

If your shop is in the EU and you have selected Taxation by destination country in your tax model settings, you can also set exceptions for EU countries other than the country of your own shop. This is useful if there are different tax classes for particular product groups in some EU countries. For example, some countries have a reduced tax rate for staple foods.

This is how you do it:

1. In the sidebar of the administration, navigate to Products → View products.
2. Select the product for which you want to set an exception.
3. In the Price section, under the Tax Class drop-down menu, select the Exceptions for other EU countries link.
   A pop-up window opens.
4. In the drop-down menu Country, select the EU country for which you want to add an exception.
5. In the drop-down menu Tax class, select the tax class you want to apply for this country.
6. If you want to add further exceptions, select + Add exception. Repeat steps 4 and 5.
7. Once you are done, select Save.

You have set different tax classes for the desired EU countries. The number of exceptions you have added is also displayed behind the Exceptions for other EU countries link. This way you can easily track if and how many tax exceptions you have already set for this product.

To delete an exception, open the Exceptions for other EU countries pop-up again, select next to the desired exception, and confirm your changes with Save.