Does anyone like taxes? We guess not. However, if you are running a commercial website in Magento, tax is an unavoidable headache.
Calm down. We know you. Let us illustrate how to add tax in Magento 2 in the most possibly simple way. Trust us, this piece of words will consume you only 5 minutes, then you will be able to:
- Create new tax rates
- Assign tax classes for specific products and customer group
- Set up tax rules that is the combination of product and customer classes, tax zones, tax rates, etc…
Basic of Magento 2 taxes
Before studying the method, let’s get to know the basic of Magento taxes. In general, every product in Magento websites is charged by the system of tax rules. On the other hand, the tax for each product would depend on who buys it and which product class it belongs to. In detail, the Tax Rules consist of the two features as following:
- Tax Classes (product and customer class): these determine the customer group and product group to be assigned the tax rate
- Tax Rates: these determine the rate online customers might need to pay
Just have a look at this infographic below and you will see the basic process of creating and assigning tax rules to product and customer groups on Magento 2.
As you can see, you have to set up the classes for products and customers, each product and customer belongs to the unique tax class. Inside each tax class, Magento setup tax rate merchant, in which we create the value number of the tax rate and the location where customers are taxed. Here we are, finishing setting up tax rules in Magento 2 after 3 minutes.
Create new Magento 2 tax rates
Basically, in Magento 2, tax rates are the roots of each tax rule. The meaning of setting a tax rate is to assign a tax rate to an exact region. Basing on that, taxes are added initially in Stores > Taxes > Tax Zones and Rates > hit Add New Tax Rates button. In here, you will add the name of the tax rate (tax identifier), zip/postcode, region, and the rate number. Also, the title of each tax rate can be changed among store views.
Create new Magento 2 tax rules
After creating the new tax rates, the next step is to assign these tax rates to the product tax class and customer tax class. On the other hand, each customer is assigned to a customer class, and each product is assigned to a product class. Magento processes the shopping cart of each customer and calculates the appropriate tax according to the customer and product classes, and the region (based on the customer’s shipping address, billing address or shipping origin).
To create new tax rule, go to Stores > Taxes > Taxes Rules > Add New Tax Rules.
In this setting, you must choose the tax rate(s) that is/are created. Also, you can create a new tax rate, even in here, by hitting the Add New Tax Rate button and fill in all the information needed.
After that, click in Additional Setting and assign tax rules to Customer tax class and Product tax class.
Note: Choose Import Tax Rates if you have many tax rates need to set up and don’t want to edit them manually.
Do you feel like our guide is so simple for you to add your first tax on your Magento 2 website? We are so glad to share with you guys useful techniques and configurations that help you easily set up your online business.
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