Managing taxes

The great unavoidable: taxes. If you're a retailer, and even as a wholesaler in some jurisdictions, you will need to master the management of tax rates and rules in your Magento store. We've had to deal with this issue on many other platforms, and while some do provide some cool features, none, in our opinion, offer as much flexibility for taxes as Magento. Especially when it comes to VAT taxes.

Note

As you'll appreciate while going through this section, taxes can be quite complicated. Before configuring taxes in your online store, you should consult your tax professional. Making errors in taxes can not only present legal issues for your business, it can erode consumer confidence if customers feel they're being inappropriately taxed on purchases.

How Magento manages taxes

Taxes are applied to products based on assigned Tax Classes. Tax Classes are combined with Tax Zones and Rates to create Tax Rules. Tax Rules are what are applied to each product or shopping cart to determine...