Setting up taxes

Tax Settings is where you turn tax on, say whether your prices include VAT, and create the tax zones and rates for the regions you sell to. You find it under Settings, then Store Settings, on the Tax Settings tab. A UK store can set up VAT with Quick Setup in a few clicks.

Considerations

• Check Prices Entered With Tax before you take orders. If you type VAT-inclusive shelf prices, as most UK stores do, choose Yes, I will enter prices inclusive of tax. Otherwise checkout adds tax on top of every price, 20% in the UK. Changing this later does not update your saved prices.
• Tax is only charged when Enable Taxes is on and an active tax zone matches the customer's address.
• Enter your VAT number as the Tax Registration Number. Without it, your store cannot download or email VAT invoices, and no VAT invoice is sent after payment.
• Reduced and zero rates only apply to products in the matching tax class. Every product uses the Standard Rate class by default.

Open Tax Settings

1. From your Orbit dashboard, go to Settings, then Store Settings.
2. Click the Tax Settings tab. The page shows Global Tax Configuration, Quick Setup, Tax Classes and Tax Zones & Rates.

Turn tax on and set how it works

1. Under Global Tax Configuration, turn on Enable Taxes. The rest of the settings appear.
2. Set each option below to suit your store.
3. Under Tax Registration Number, enter your VAT number, for example GB123456789.
4. Click Save Changes. The message Tax settings updated appears. To undo unsaved edits, click Discard.

The settings under Global Tax Configuration:

• Prices Entered With Tax: whether the prices you type in the dashboard include tax. No, I will enter prices exclusive of tax or Yes, I will enter prices inclusive of tax.
• Calculate Tax Based On: which address picks the tax zone. Customer shipping address, Customer billing address or Store base address.
• Charge Tax on Shipping: adds tax to delivery charges. When on, Shipping Tax Class appears so you can pick which class your postage falls in. Standard (default) is the usual choice.
• Round Tax at Subtotal Level: rounds tax once on the subtotal instead of on every line.
• Display Prices in Shop and Display Prices During Checkout: show shoppers prices Excluding tax or Including tax.
• Tax Registration Number: your VAT number. It prints on VAT invoices.

Tip: A UK shop selling to the public usually wants prices entered inclusive of tax and displayed Including tax in both places, so the price on the shelf is the price at the till.

Run Quick Setup for your region

Quick Setup creates the tax zones and rates for a region so you do not have to build them by hand.

1. If Tax Classes reads No tax classes yet, click Seed Defaults. Orbit creates three classes: Standard Rate, Reduced Rate and Zero Rate.
2. Under Quick Setup, tick the regions you sell in.
3. Leave Enable tax collection and Charge tax on shipping ticked unless you have a reason not to.
4. A line reads how many zones and rates will be created. Click Set Up Tax Rates.
5. Click Confirm Setup. A message reads Auto-setup complete and the new zone appears under Tax Zones & Rates.

The presets and what they create:

• United Kingdom: one zone with three rates: standard (20%), reduced (5%) and zero (0%) VAT.
• European Union: 27 zones and 27 rates, the standard VAT rate for each member state.
• United States: 51 zones and 51 rates, state-level sales tax for all 50 states and DC.
• Canada: 13 zones and 17 rates, GST, HST and PST for every province and territory.
• Australia: one zone and one rate, a flat 10% GST.

Note: A zone with the same name as one you already have is skipped, never overwritten. So you can run more than one preset, and re-running one is safe.

How zones and rates work

• A tax zone is a region where tax is charged, such as a country or a state. Each zone holds one or more rates.
• Orbit matches the customer's address to a zone and applies its rates. More specific zones take priority.
• A rate can apply to all classes or to one tax class. The UK preset's reduced and zero rates are tied to the Reduced Rate and Zero Rate classes. Every product uses the Standard Rate class by default, so reduced and zero-rated goods are charged 20% until they are in the right class. See Handling tax overrides and exemptions.
• Click a zone card to open it and see its rates. Use Edit Zone, Delete Zone, or Add Rate from there.

Note: After the United Kingdom preset, the open zone shows an amber notice that Standard VAT and Reduced VAT are both marked as applying to shipping. Delivery is taxed at one rate only, the one matching your shipping tax class. To clear the notice, click Edit on the Reduced VAT rate, untick Apply to Shipping and click Update Rate.

Add a zone by hand

Use this for a region the presets do not cover.

1. Under Tax Zones & Rates, click Add Zone.
2. Enter a Zone Name.
3. Under Regions, select the countries and states the zone applies to.
4. Leave Active on and click Create Zone.
5. Open the new zone and click Add Rate.
6. Enter a Name and the Rate (%).
7. Under Tax Class, leave All classes (default) or pick one class.
8. Tick Apply to Shipping if this rate should also tax delivery. Click Create Rate.

Related guides

• Handling tax overrides and exemptions
• Setting up your store details
• Setting up shipping zones and rates
• Sending an invoice