How to Configure Advanced Tax Setup with Stripe Tax?
Table of Contents
To manage your taxes, you need to navigate to Settings > Taxes from the left menu.
Our platform offers two types of tax management:
- Basic Tax Setup: This is our free service that includes predefined rules and suggested rates for selected countries (USA, Canada, EU, UK, Australia) with the option to manually create rates for all other countries.
- Advanced Tax Setup: A paid service provided via Stripe for advanced compliance.
In this article, we will cover the use of the Advanced Tax Setup using Stripe Tax. If you wish to use the Basic Tax Setup, follow the instructions in our designated article.
Advanced Tax Setup using Stripe Tax
Stripe Tax simplifies tax calculation and collection by considering the various tax rules and rates across different countries. If you decide to use Stripe Tax, you need to create a Stripe account or log in into an existing Stripe account.
Connecting a Stripe Account
To get started, select the Advanced Tax Setup and then click on Enable.
This will take you to a Stripe hosted page and prompt you to sign into an existing Stripe account or create a new one.
Note that if you have connected Stripe for online payments in your store, when you click on Connect, you will see the label changing to Check configuration which will check whether you have already configured Stripe Tax for this account.
Configuring Tax Settings in Stripe
Once your Stripe account is created, you need to configure the following tax settings in Stripe dashboard -> Tax:
- Origin Address: Indicate the country where your business is based (defaults to the country used when creating your Stripe account).
- Preset Product Tax Code: Choose a default tax code that applies to all your products unless a different tax code is specified for individual products in your store.
- Default Shipping Tax Code: Indicate whether tax is charged for the shipping rates set up in your store.
- Include Tax in Prices: Decide whether the product prices which you entered in the ecom admin of your store should be treated as already including or excluding tax.
- Add Registration: Click on the Registrations tab in Stripe Tax and follow the steps to set up your tax registration details.
After configuring your tax settings, click Check Configuration in your store’s Taxes page. If the tax setup in Stripe is complete, the status will change to Enabled. If the tax setup is not complete yet, you will be redirected again to the relevant Stripe Tax page to provide any missing information.
Assigning Stripe Tax Code to a Product
If you sell products which are taxed differently, you can assign individual Stripe Tax codes for each product.
To do that, go to the single product page of the product and select or search for the tax code in the Stripe Tax Code field. If you don’t select an individual code for a product, the Stripe Preset Product Tax Code is used by default. You can find more information about adding Stripe Tax Product code in this article.
