Taxes

Depending on which country you are based in, you may use either inclusive taxes or exclusive taxes.

Inclusive Tax

Inclusive taxes are already included in the displayed price of an item, such as Value Added Tax (VAT). This means that the price the customer sees is the total amount they will pay during checkout.

For instance, if a Variant is priced at £100 and it includes a 20% VAT, the £100 is the final price the customer pays. The VAT has already been calculated and added to the displayed price of £100.

Exclusive Tax

Exclusive taxes are added on top of the displayed price, such as U.S. sales tax. This means that the price the customer sees does not include the sales tax, which will be calculated and added during checkout.

For example, if a Variant is priced at £100 and the local sales tax rate is 8%, the final price the customer will pay at checkout is $108.

Set up a tax and tax rate

Create Tax

1. Go to Settings > Payments.
2. Scroll to the bottom and click Create Tax.
3. Add in the name of the tax (i.e. VAT). This is the name that will be displayed to customers in checkout and invoices.
4. (Optional) Add in your tax number if applicable (i.e. VAT number).
5. Set the Calculation method to either Inclusive or Additional. Important: The calculation method cannot be adjusted after an item this tax applies to has been booked.
6. Click Create.

Create tax rates

1. After creating the type of tax, the next step is to add the specific rates by clicking Add tax rate.
2. Set a name for the rate. This name will be displayed to customers in checkout and invoices.
3. Set the Tax rate percentage of that tax. 

Important: The tax rate percentage can be modified until it is applied to an item that has been booked, so ensure it is correct before finalising your changes. This helps maintain an audit trail for any changes. If a tax rate needs to be updated, we recommend renaming the existing rate and creating a new rate. Be sure to update any Variants and Extras that it applies to.

Apply tax rates to items

To apply tax to items you sell, navigate to the Variant or Extra you would like to add tax to. Click the Variant or Extra to edit it, and go to the Price tab. At the bottom, you will see the Taxes section. From the drop-down menu, select the tax rate to apply to that Variant or Extra.

Reporting

Sales report

There are new columns in the sales report in both your home currency and the customer's currency.

• Revenue allocation (incl. taxes): The total amount received for the line item, including fees, discounts, and taxes. The revenue allocated to this sale taking into account the package revenue allocation rules and including the taxes you set up to apply to this item, if any.
• Tax amount: The total tax for that line item. If multiple taxes are applied to the item, this is a sum of them.
• Revenue allocation (excl. taxes): The total amount received for the line item, minus the tax amount. The revenue allocated to this sale taking into account the package revenue allocation rules and excluding the taxes you set up to apply to this item, if any.

Taxes report

The Taxes report displays each tax applied to every line item and proves information on the specific tax rate used. If multiple taxes are applied to an item, the report will list each tax separately, resulting in multiple lines displaying the tax amounts for each rate.