Welcome to the second chapter of this WooCommerce guide for tax option configuration.
The taxes you may want to add to your store might fall under three different categories:
Is the default taxing system WooCommerce offers its customer and the most commonly used for online stores.
In this section we can create tax rules for all those products that require no specific action in terms of taxing.
Not all categories of products fall under the same tax rule, that’s why if your store deals in different kinds of items, you may require a reduced tax rate to cover all of your products.
For instance, electronic products have a different tax rate rather then basic necessities such as clothes.
There are also products that don’t need to get taxed, if your store deals in these kind of items, you need to create a specific rule.
In any case, the process of creating a tax rule is the very same one. That’s why in this tutorial I’m going to create a standard tax rule for my store.
As I’ve done in previous articles, I’m going to use as an example an online store that’s based in Spain.
To create a new Tax Rule go to WooCommerce > Settings > Tax > Standard Rates:
Once you reach to this page, click on Insert Row to create your tax rule.
Now you should set a list of parameters for your rule, first of which the "Country Code":
The Country Code is an alphabetic code made of two or three letters which identifies the country a specific tax rule applies to (you can find the whole list here). WooCommerce uses the ISO 3166-1 format:
For instance, if we want to set a rule for the country of spain, we are going to enter “ES”.
Now you can set the State Code (if required):
State code is a another code that's required in case the country you entered is part of a federation (such as the United Stares) You can find the whole list here, leave this field empty if unrequired or if you wish to include all of the states in a federation. In my case, Spain, I left the field empty.
The next section is the Postal code/ZIP code:
Postal code has a different format in each country, you can view the full list here. You can also enter a code range (i.e. 1000-2000) or leave this field blank and let it apply to the whole country as I did.
The next part is the "City" field:
You may choose whether to apply your rule to a city, more then one or all of them. In this last case, just leave this field empty, but you can always specify which cities it applies to by entering their names separated by a semicolon (i.e. :Paris; Lion)
Now we should define the rate required buy your tax rule, in the “Rate %” section:
You might not know the required rate, especially if you are selling to countries outside your own. In which case you can find the complete list of worldwide tax rates here.
Considering that Spain has a 21% VAT rate, that’s what I’m going to enter in my configuration:
Now you should pick your tax name:
There are three different types of taxes, that's why the name can be very important.
In my case I could call it VAT or Value Added Tax.
We are reaching the bottom of the tax section, let's see how to set its Priority:
You can set different taxes for the same parameters: in this case it's important to establish the order of priorities that's going to be used once they are applied. For instance if I have a 10% tax and a 7% tax applying to the same products, I can pick which one is going to be applied first (assigning 1 to the first one and 2 to the second one, in order for 1 to have priority).
Now you can fill in the “Compound” section:
You may consider the Compound as a tax on taxes, it's actually a specific kind of tax that applies to other taxes and you can activate it by checking its dedicated box.
Now you can set the Shipping taxes:
It's a good idea to offer free shipping whenever possible, but in case you want your customer to pay for the shipping expenses, then you can tax the shipping costs by checking the box for this function.
What you have seen so far is how to manually set a tax, but in the lucky case you have your required tax information in a CSV file, you may import it in just a few clicks and apply it to one or more states. To do this, click on Import CSV:
You can also do the opposite process: by clicking on Export CSV you can export your own configuration to use it again elsewhere.
And you are set: you are done with the tax rules section. Remember you can create as many as you like and keep in mind to click on “Save Changes” to avoid losing your chanes.
See you in the next chapter!