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How to Add Tax

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Getting Zoho Commerce tax settings right matters for UK businesses, covering VAT and any regional tax variations, so pricing and checkout stay accurate and compliant. This guide walks through setting up taxes.

How to open tax settings

  1. In your Zoho Commerce dashboard, click Settings in the left menu, then Taxes.

Automatic tax calculation

Turning on Automatic Tax Calculation lets Zoho apply current tax rates, including UK VAT, based on the customer’s address. This is the recommended option for most UK stores.

Adding manual tax rates

Manual rates are only available if automatic calculation is turned off.

  1. Click Manage Tax Rates > Add New Tax.
  2. Enter a tax name, such as “UK VAT”, choose whether it applies to products or shipping, and select Specify Rates Per Zone.

Creating destination zones

  1. Go to Settings > Destination Zones and click Add New Zone.
  2. Name the zone, for example “UK Mainland”, select the regions it covers, and click Save.

Assigning tax rates to zones

  1. Go back to Taxes > Manage Tax Rates > Add New Tax.
  2. Use Specify Rates Per Zone, choose the zone, set the rate, for example the UK’s 20% standard VAT rate, and click Save.

Handling non-taxable products or customers

Everything is taxable by default. To exempt a product, set its tax rate to 0% under Manage Tax Rates or the product’s own settings. To exempt a customer, such as a charity, mark them as tax-exempt in Contacts.

Fixing checkout tax issues

If tax does not calculate correctly at checkout with a provider such as PayPal, set your zone to be defined by shipping address rather than billing address, since PayPal does not always provide a billing state.

Tips

  • For UK-wide sales, the standard VAT rate applies unless a product qualifies for a different rate.
  • Split zones where a region, such as Northern Ireland, needs a different rate.
  • Use automatic calculation unless you have a specific reason to manage rates manually.

Frequently asked questions

Should I use automatic or manual tax calculation?

Automatic calculation is recommended for most UK stores, since Zoho applies current VAT rates by address. Use manual rates only if you have specific zone requirements.

Can I exempt certain products or customers from tax?

Yes. Set a product’s tax rate to 0% to exempt it, or mark a customer, such as a charity, as tax-exempt in Contacts.

What if tax is not calculating correctly at PayPal checkout?

PayPal does not always supply a billing state, so set your zone to be defined by shipping address instead.

Need help?

Need help setting up VAT or tax rules in Zoho Commerce? Contact support@thoughtlogik.com or see our Zoho implementation services.

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