Configuring Shipping Taxes for WooCommerce Shipping Methods

Configuring Shipping Taxes for WooCommerce Shipping Methods

Taxes are never much fun to deal with when you are managing a business. But it is again an unavoidable factor for any business. Shipping costs and taxes associated with it are quite unpredictable. In this article, let us take a look at configuring shipping taxes for WooCommerce shipping methods.

Introduction

Taxes are not so easy to work with. Every place has different tax rules to work with and even tax rates. Shipping taxes play a vital role in any business. Shipping is integral and when not dealt right, you might turn away a potential customer. WooCommerce offers comprehensive settings in configuring taxes. As it is important that businesses follow the basic tax rules and obligations followed in the country they put up businesses as well as the countries to which they ship their items. To maintain transparency, it is essential to set the taxes correctly. Go through the complete guide to configure your WooCommerce taxes to set your WooCommerce tax correctly.

Setting up WooCommerce Tax

In order to set up WooCommerc tax, firstly you need to enable the tax option in the WooCommerce settings. WooCommerce Tax || Enable tax settings on WooCommerce

Upon enabling the tax option, you get a Tax settings tab in WooCommerce.

WooCommerce Tax || Enable Tax option

And the Tax options have various fields

WooCommerce Tax || Tax options settings on WooCommerce

Here we can set all the tax options. Let us take a look at the tax options settings in WooCommerce.

Prices entered with taxes:  You can either enable the options to enable the option to enter prices with Tax or without tax.

Calculate Tax based on -This option lets you decide on which address basis, the tax calculation is done. Basically there re three options – Customer Shipping address, Customer billing address, Shop base address.

Shipping tax class – Here, you can choose which of the shipping class is suitable for you. By default there re Standard, Zero, and Reduced rate. You can also add additional tax classes, which will appear here upon adding.

Rounding – Here, upon enabling the tax will be rounded at the subtotal level instead of rounding per line

Additional Tax Class– If you want to set new tax class for your store, you can do the same by just typing in the new name and then it will appear as the new Tax Class in the Tax page,

Display Prices in the Shop – This option lets you decide whether to display the prices in the shop by excluding or including tax.

Display prices during the basket and checkout – This option lets you decide whether to display the prices during the basket and checkout by excluding or including tax.

Price Display Suffix – Here you can set the suffix statement to appear along with the price. You can include – {price_including_tax}
{price_excluding_tax} , in the text box. Example – Price incl. VAT: {price_including_tax}.

Display Tax Totals –  You can choose whether you want to display the tax totals as a single value or as itemized.

Once you are done with these settings, you can successfully set the tax values.

Setting up tax for WooCommerce Shipping

In order to set up tax for WooCommerce shipping, you can do it specifically in the tax rates setting. You can add tax rates to the columns given in the Standard option. For that, you can enter the values and then enable the option to include tax in shipping.  Let us take a look at the same :

WooCommerce Tax || WooCommerce Tax in Shipping

Here, you can enter the details like the Country code, state code, postcode/ zip, city, rate%, tax name, Priority, compound, and shipping.

Country code –Here you enter a 2-digit country code. The code can be found in the ISO 3166-1 alpha-2 code for all the officially assigned countries. You can leave it blank if  you don’t want to specify a single country,

State code – Here, you need to enter a two-digit abbreviation code for states example: NY, wherever it is applicable. Leave it blank, if you do not want to enter and apply to all states.

Postcode / Zip-  Provide the zip/postcode for the tax region. You can enter multiple zip codes for a single region also separated with a semicolon. For example, if you want to add all zip codes starting with 80, then you can add ‘70*’ to apply the tax rates to all. Similarly, you can provide a range like 70001…70009 to apply the tax rate to all zip codes that come within the specified range.

City– Provide the city or the cities where the particular tax rate is applicable. You can add multiple cities, by using the semicolon as a separator. Leave it blank to apply to all the cities.

Rate %-  Here you can specify the rate of applicable tax with 4 decimal places. For example, to set a tax rate of 20%, you have to enter 20.0000 or for a rate of 25.5%, enter 25.5000.

Name –  Here you can enter a name for the tax rate. For example, Tax-A, Tax-B, VAT, etc. depending on your requirement to distinguish it easily.

Priority- Here you can choose a priority for the tax rates provided. You need to set different priorities for the taxes in the same region.

Compound Taxes– To apply the taxes mentioned on top of all the other taxes, you can tick this checkbox.

Shipping-If you want this tax rate to apply to the shipping charges on your WooCommerce store, then you need to tick this checkbox. On enabling this, the tax rate will be applied to the product price and the shipping charges in your store. When unchecked, the tax rate will be calculated based on the product price alone in your store.

Hence upon enabling shipping, you can see the tax rates:

WooCommerce Tax || Tax in Shipping

How to Configure a tax rate for WooCommerce shipping methods?

WooCommerce shipping has basically three shipping methods to offer – Free shipping, Flat-rate, and Local Pickup. Now you can configure tax rate for these WooCommerce Shipping methods. To do so, firstly you need to set the shipping zones and the shipping methods for each.

WooCommerce Tax

Once the zone is set, you can choose flat-rate and then enable the taxable option for flat-rate shipping. You can also set an additional cost if you want to charge.

WooCommerce Tax || Tax for flt rate

In the same way, you can set it for local pick up too.

WooCommerce Tax

Once these settings are enabled you can see the required tax option enabled for the same in the store.

WooCommerce Tax

Configuring Tax Settings for External WooCommerce Shipping Methods

If you are using a Shipping plugin to display shipping live rates and also print shipping labels as well as to track the shipments, then you can also configure tax settings for the shipping methods. Suppose you are using the DHL Express Service, then you can effortlessly integrate the DHL Express service to the WooCommerce store using the ELEX WooCommerce DHL Express / eCommerce / Paket Shipping Plugin with Print Label plugin. Upon installing and using the DHL Express plugin, you can see various WooCommerce DHL services listed on your store in the cart and checkout page. 

DHL Shipping Services

Now when you enable the tax for these shipping methods, you can see that the prices are displayed including or excluding the taxes as per the settings. DHL also provides a great way to analyze the total break down charges using the settings:

Using the show/Hide settings, in Rates and services, you can enable the “Show Break Down Charges “. Upon doing it you can see the total break down charges :

Along with that, you can see the taxes applied for the shipping in the tax settings.

Apart from DHL, you can also configure the WooCommerce tax for your WooCommerce store using various other external shipping plugins like :

Final Thoughts

The above methods help configure the WooCommerce tax for WooCommerce shipping methods.

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