Different sales taxes can be defined in the system. For example VAT for the UK, GST for Singapore, PST/GST/HST in Canada.
If you do not wish to apply taxes, simply turn them off in the Settings > Finance menu by ticking “No taxes”.
Next you can define if your product prices are inclusive or exclusive of taxes. If they are inclusive of taxes, tick the setting “Prices in DB are incl. taxes” in Settings > Finance. If they’re exclusive, untick the box.
Taxes can be created and modified via the Taxes menu in the back end. By default a VAT is created in the system. You might want to overwrite or delete this one.
When creating a new tax you will have 2 fields to enter:
- label: A description such as VAT, PST, … something your customers should understand as it will appear on their invoices.
- cascading: Indicates if this is a cascading tax. A cascade tax or cascading tax is a turnover tax that is applied at every stage in the supply chain, without any deduction for the tax paid at earlier stages. This is for example the case in Canada when applying both PST and GST. Note that this is only relevant if you have more than one tax to charge.
Once you’ve created the tax, you can start entering the rate. Hover over the tax record and you’ll see links appearing, click on the Rates link. You can now create one or more tax rates. Tax rates can be differentiated by:
- country: The country of your customer.
- state: The state your customer is living in.
