Tax #101

Ana Brandรฃo
Ana Brandรฃo
  • Updated

Introduction

When we talk about taxes applied to an order, Shopify is expected to provide inventory feed prices as NET (i.e., VAT exclusive). They are usually applied at checkout by Shopify if the settings are determined accordingly.
Although Shopify prices are intended to be VAT-exclusive by default, vendors may use them differently by choosing not to apply taxes and setting a VAT-included retail price instead.
Because Onport does not apply any taxes, the Marketplaces must be mindful of the prices their vendors are using to calculate taxes and adjust their settings.

In Onport, these are the important settings marketplaces need to be mindful of:

To integrate with your online accounting platform

Integrations > Accounting โ€” If you work with one of the out-of-the-box integrations we have available, you must follow the steps here:

๐Ÿ”Ž Xero integration

๐Ÿ”Ž TaxJar

โ—๏ธ๏ธDisclaimer: Note that this feature is only available to the Advance Plan or above.

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To Setup Tax Rates

Setup > Tax rates โ€” In Onport you can set different tax rates for your different vendors in regard to your payout invoicing. We suggest you look into this article:

๐Ÿ”Ž  Manual tax rate setup

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To decide which tax rate is applied across the platform

Contacts > Dropship Providers > Select a Dropship Provider > Orders > Platform tax rate โ€” After creating a tax rate you can associate with different vendors.

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To decide how tax behaves for each Dropship Provider

Contacts > Dropship Providers > Select a Dropship Provider > Tax tab โ€” We always recommend seeking advice from your accountant on the most appropriate way to handle taxes for your business and once you have your tax strategy defined you can add the tax information of your vendors. These articles can be helpful:

๐Ÿ”Ž Calculating tax for dropship providers 

๐Ÿ”Ž How to charge my vendors for tax

๐Ÿ”Ž How to invoice the end customer

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To decide how tax behaves on inventory feeds

Inventory > Inventory feeds > Select an inventory feed > Inventory and Prices > Tax Setting - Following the setting applied by the vendor in their store, you need to select the option that matches in Onport, in case you donโ€™t want to override the tax status of products. We suggest you look into this article:

๐Ÿ”Ž Tax handling

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