We have changed the way our platform calculates sales tax. Previously, sales tax was calculated on the order total, whereas now the calculation takes place at the line item level. As a result we are able to have differing tax rates for each line item within an order.
In some countries certain types of products have a reduced tax rate, to support this we have added the option for marketplace operators to set custom sales tax rates for categories and have these override the default tax rate for your marketplace when calculating line item totals.
How to setup a custom sales tax rate:
- Login to your marketplace admin panel.
- Navigate to 'Categorisation' -> 'Categories':
- Navigate to a category leaf that you wish to apply a custom sales tax rate to, click 'Edit' scroll down to the 'Override sales tax' setting, click to enable it and enter your sales tax rate:
- Click 'Update category' at the bottom of the page to save the changes:
- Any advert that is assigned to that category will now use that tax rate. In our example, you can see this advert is now GST free:
Notes:
- The custom rate must be set on a category leaf (the category that adverts are assigned to), not the tree.
- When the secondary taxon feature is used, the primary taxon will be what determines the tax on the item in both categories
- Postage tax rates for line items/invoices will still always use vertical tax rates regardless of category custom tax rates.
- If your marketplace is utilising Avatax, you will not be able to configure rates on the category as Avatax provides these rates.
- Final invoice totals will not be affected for tax inclusive countries.