Taxes

BackOffice>>Payment>.Taxes

How PrestaShop calculates tax
Creating a tax
Assign a tax to a product
Deactivate taxes for the entire store

Taxes in PrestaShop can be assigned to a product, a state/region, or a zone. To assign a tax, you must first create the tax, thus adding it to the list of taxes available in your online store.

How PrestaShop calculates tax

When a customer purchases a product in your online store, PrestaShop first checks whether or not the customer resides in a state.

If so, the tax is applied according to the tax behavior that the merchant sets up in Back Office >> Shipping >> States >> the state in question.

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If the customer resides in a country but not in a state, PrestaShop applies taxes according to product tax and zone only.

The following chart illustrates the process by which PrestaShop determines how to apply tax to a purchased item.

Creating a tax

If you are creating a tax that will be associated with at least one zone or state/region, then you must create the zone or the state before you can create the tax.

After you have created the zone or state, you can create the tax:

   1. Go to Back Office >> Payment >> Taxes
   2. Click Add new.
   3. In the Tax detail page, type the name and the rate.
   4. Mark the checkbox(es) of the Zone and/or State in which you want to activate the tax.
   5. Click Save.

Assign a tax to a product

Unless your taxes are determined solely by state taxes, you must assign a specific tax to a specific product:

   1. If you have not created the tax, you must create it before you can assign it to a product.
   2. After you have created the tax, go to Back Office >> Catalog >> (Category, if any >>) Product’s admin page.
   3. On the Information tab, select a tax from the Tax drop-down list.
   4. Scroll down and click Save product properties.

Note: Be sure to activate the tax in the appropriate zones in Back Office >> Payment >> Taxes >> Tax detail page. If a customer buys a product with an assigned tax but lives in a zone for which that tax has not been activated, the tax will not be applied.
Examples: Assigning different taxes to different states/regions/provinces

For merchants in the US and Canada and elsewhere, it is sometimes necessary to apply no taxes or a combination of taxes to a customer’s order, depending on the billing address.
Canada

The following is an example of how to set up taxes in Canada so that all users pay a global tax and the residents of a particular province pay an additional tax.

Let’s say that you want to assign a single uniform tax of 5% to all products in your catalog. However, residents of Quebec must also pay an additional 7.5% tax:

   1. In Back Office >> Shipping >> Zones, you create a Zone, “Canada”.
   2. In Back Office >> Shipping >> Countries, you create a country, “Canada”, assign it to the “Canada” Zone, and for the field Contains states you indicate Yes.
   3. In Back Office >> Shipping >> States, you create the Canadian provinces and you assign them to the country “Canada”. For each, in the Tax behavior field, you indicate Product tax — except Quebec, for which you indicate Both product & state tax.
   4. In Back Office >> Payment >> Taxes, you create two taxes, 5% and 7.5%.
          * For the 5% tax, you mark the “Canada” Zone checkbox.
          * For the 7.5% tax, you mark only the “Quebec” State checkbox.
   5. For each product in your catalog, select “5%” in the Tax drop-down list.

United States

The following is an example of how to set up taxes in the US so that no customers pay any tax except the residents of certain US states.

Let’s say that only residents of Pennsylvania, California, and Texas have to pay a 5% sales tax.

   1. In Back Office >> Shipping >> Zones, you create a Zone, “USA”.
   2. In Back Office >> Shipping >> Countries, you create a country, “USA”, assign it to the “USA” Zone, and for the field Contains states you indicate Yes.
   3. In Back Office >> Shipping >> States, you create the US states and you assign them to the country “USA”. For each, in the Tax behavior field, you indicate Product tax — except Pennsylvania, California, and Texas, for which you indicate State tax.
   4. In Back Office >> Payment >> Taxes, you create one tax rate, 5%, for which you mark only the Pennsylvania, California, and Texas checkboxes.
   5. For each product in your catalog, select “No tax” in the Tax drop-down list.

Deactivate taxes for the entire store

To turn off taxes for your Front Office:

   1. Go to Back Office >> Payment >> Taxes
   2. In the Tax options section, select Yes or No to have taxes enabled on the Front Office.
   3. Click Save.