How to Add Tax

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Introduction

Getting your tax settings spot-on in Zoho Commerce is essential for UK businesses. Whether it’s VAT or regional taxes, setting them up correctly ensures pricing accuracy, legal compliance, and a smooth checkout process. This guide will walk you through the process in clear, friendly steps.

Keywords: Zoho Commerce tax setup, UK VAT, add tax Zoho, tax settings manual

Step-by-Step Instructions

1. Navigate to Tax Settings

Go to your Zoho Commerce dashboard.
Click Settings in the left menu → Taxes.

2. Enable Automatic Tax Calculation (Optional but recommended)

Toggle Automatic Tax Calculation to enabled to let Zoho fetch the latest tax rates.
This covers UK VAT and ensures correct calculation by address.

3. Add Manual Tax Rates (for specific needs)

Only available if automatic is turned off.
Click Manage Tax Rates → Add New Tax.
Input: Tax name (e.g., “UK VAT”), select applies to products/shipping, and set Specify Rates Per Zone.

Define zones (e.g., UK Mainland, Northern Ireland) via Destination Zones.

4. Create Destination Zones

Under Settings → Destination Zones, click Add New Zone.
Name your zone (e.g., “UK Mainland”), select applicable regions, then Save.

5. Assign Tax Rates to Zones

Return to Taxes → Manage Tax Rates → Add New Tax.
Use Specify Rates Per Zone, choose your zone, set rate (e.g., 20%), and Save.

6. Handle Non-Taxable Products or Customers

By default, everything is taxable.
To exempt specific products, set their tax rate to 0% under Manage Tax Rates or product settings.
For customers (e.g., charities), mark them tax-exempt in Contacts.

7. Fixing Checkout Issues (e.g., PayPal)

If taxes don’t calculate correctly via PayPal, adjust Zone defines by to Shipping address. PayPal doesn’t always supply billing state.

Tips

Keep VAT settings simple: For UK-wide sales, a 20% standard VAT rate applies.
Split zones if needed: Use separate rates for Northern Ireland if different.
Use automatic calculation unless you sell in niche zones requiring manual setup.
Use tax groups: Combine state and local taxes under a single group (more relevant in multi-jurisdiction setups)
Consider third-party tools: Tools like Avalara AvaTax integrate automatically for businesses dealing internationally.

How to Add Tax

Introduction

Step-by-Step Instructions

1. Navigate to Tax Settings

2. Enable Automatic Tax Calculation (Optional but recommended)

3. Add Manual Tax Rates (for specific needs)

Define zones (e.g., UK Mainland, Northern Ireland) via Destination Zones.

4. Create Destination Zones

5. Assign Tax Rates to Zones

6. Handle Non-Taxable Products or Customers

7. Fixing Checkout Issues (e.g., PayPal)

Tips

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