Tax Profiles

The tax profiles section allows you to group one or more tax rates. The tax rates can be customized to calculate the taxes based on the billing address (customer) or shipping or the store's address.

Watch this video

[Tip] Tip

In most countries, tax is collected based on the billing address. In a few rare cases, we may need to collect tax based on shipping address.

This guide will explain the tax profile feature using examples.

Tax Profile Example 1

Example 4.3. A simple tax profile example

[Important] Important

This example assumes that you have your store in Texas, USA. You want to charge 12.5% tax for the customers from Texas and no tax for all others

Follow these steps to configure the tax

  1. Go to Store Profiles and create a store profile, if you have NOT created any.

    Set the Default Country to USA and the Default Zone to Texas

  2. Go to Geozones and create a Geozone.

    Name this geozone as Default Geozone (you can name it differently too. This is just for the example).

    Click SAVE

    In the country/zone mapping area (see screenshot), choose the Country as United States and the Zone - Texas. Click Add country/zone button

    Geozone
  3. Go to Tax Rates and Click New to create one

    Name : VAT (you can give any name here)

    Tax Percent 12.5

    Geozone Default Geozone

    Status Published

    The tax rate screen should look like the following screenshot

    Taxrate
  4. Go to Tax Profiles and Click new to create a new tax profile

    Tax Profile Name : Default Tax Profile (you can give any name here)

    Click SAVE (NOTE: Not save and close)

    Now you get the Tax Rates mapping area, where you can assign a tax rate to an address type

    Tax Rates : In this dropdown, you can see the tax rate created by you in the previous step - VAT 12.5%

    Select VAT 12.5 % and then select the address type as Billing

    Click save and close.

    Tax profile
  5. Enable the tax profile. See the screenshot below

    [Important] Important

    Publish the tax profile in the Setup->tax profiles screen after creating it. See the screenshot below

    Tax profile
  6. You are done!

    [Important] Important

    The tax profile must be added to each product individually in order to apply tax rates for a purchase. Refer the product creation section of this guide for more information