It's super important to get your taxes set up correctly, so you charge the correct amount to your customers, and don't get in trouble with your local tax authority!
Before you begin, there are some important things you need to know. Vend Ecommerce does not support: - European Union digital products ('VATMOSS') - Tax overrides (such as no tax on fresh fruit and vegetables, or luxury goods taxes) - Compound taxes - Complex US state taxes, including destination-based taxes. Vend Ecommerce can only specify one tax per province/state, and more complex taxes are not supported.
Before setting up any taxes, we strongly recommend speaking to an accountant who specialises in retail sales taxation.
How do taxes in Ecommerce work?
As a general rule of thumb, you'll only need to charge tax to customers who live in the country your store is based in (but check with your accountant to be sure!)
Within your country, you might need to charge the same tax rate to everyone, or a different tax rate to people who live in different provinces/states - it's really important to talk to an accountant about this. Some countries have very complex retail tax requirements for selling online (like the USA).
When you set up your Ecommerce taxes, you'll be linking to tax rates you've created in your Vend store. Any single tax rate can be linked to - you won't be able to link to a tax group.
This means you'll need to have already created all the tax rates in your Vend account. Some retailers (like those in Australia and New Zealand), will probably be ready to go, but if you're in a country with more complicated regional tax requirements like Canada, you'll need to spend some time setting up all the tax rates you'll require in your Vend store.
- If you have several provincial/state taxes with the same name/rate but that need to be paid to different tax authorities, we strongly recommend you set up a separate tax for each authority - for example HST - PEI and HST - Quebec. This is due to how taxes are reported in Vend. We're only able to report on the total tax amount for each tax type in a time period, not the shipping location of the customer. This means that to get accurate tax payment amounts for each tax authority, you'll need to set each tax rate up separately.
- If you have state AND county tax, you'll need to set up a single tax in Vend for these. You cannot use a group tax, as these are not synced to your Ecommerce store. For example, if you have a California sales tax of 5% AND a Los Angeles sales tax of 2%, you would need to create one tax rate in Vend for them both - an LA-California tax of 7%.
Linking your tax rates
In the Vend Ecommerce app:
Under Settings, select Taxes.
Select whether you'd like to display prices including tax.
- Select Add New Tax Rate.
- Use the Select Country drop-down to choose your country.
- Click Add Tax Rate.
- Select your country tax rate from the drop-down. This is the tax rate that applies universally across your country at a federal level (for example VAT and GST). If you have no federal tax, select No Tax.
If you have no provincial or state taxes, you're now done - we've automatically saved your tax.
If you have provincial or state taxes, click Add provincial tax rate.
Select the province.
Choose the tax rate for that province.
Choose whether the tax rate is added to the country tax or replaces the country tax. You'd use Add if you have a country and province tax, and replace if you only have a province tax and don't want the country tax to be charged.
If you've got more provincial taxes to add, click Add provincial tax rate.
Troubleshooting taxes on Vend Ecommerce
Help! I can't find the tax rate I need in the drop-down!
Tax rates are set up in your main Vend store. Make sure you've set up the tax rate there, then refresh your Ecommerce store.
I need a tax rate for the county my store is in.
At the moment, Vend Ecommerce doesn't support county-level taxation. You can try creating a single tax rate in Vend that combines the state and county-level taxes, but make sure you check with your accountant first about how this will impact your tax reporting.
I don't know what tax rates to set.
Check with your accountant or local business services. They're the best people to help you understand your local requirements.
I don't want to charge tax to out-of-state/International customers.
International customers will never be charged tax. Out-of-state customers will only be charged tax if you've got a country-level taxation rate set, or you've set up a tax rate specific to the state/province that customer lives in.
For more information on Vend Ecommerce, check out this article.