In e-commerce, properly configuring taxes is not only a legal requirement but also a key factor for running a successful business. PrestaShop offers a flexible tax setup system that allows you to adapt to various legal requirements depending on the region in which you are operating.
In this article, we’ll explore how to set up taxes in PrestaShop, what a tax rule is, and why proper configuration is so important for your online store.
Where Are Taxes Configured in PrestaShop?
Tax settings in PrestaShop can be found under International → Taxes. This section manages basic VAT setup and other tax parameters for your online store. You can control taxes for both local sales and international transactions here.
Key Settings on the “Taxes” Tab
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Enable VAT
This setting allows you to enable or disable VAT for sales. If your business is tax-exempt or you operate in a jurisdiction where taxation is not required, you can disable VAT and sell products without taxes. -
Display tax in the cart
This option lets you decide whether to display the tax as a separate line in the cart during checkout. This can be useful for increasing price transparency for your customers. -
Based on (Invoice or legal address, Shipping address)
Here, you choose which address to use for tax calculation — either the company’s legal address or the customer’s shipping address. This is especially important for cross-border sales where tax rates may vary. -
Use eco-tax
Eco-tax can be applied to products based on your country’s legislation. You can disable it, and all eco-tax rates will be set to 0.
How to Set Up Tax Rules in PrestaShop?
The second important tab is Tax Rules. In PrestaShop, a tax rule is a combination of taxes applied based on the customer’s country or region. With tax rules, you can set different tax rates for different countries, which is essential for international sales.
Example of a Tax Rule:
- If you sell products to the European Union, you need to configure tax rules for each EU country since VAT rates can vary.
- If you ship to the USA, the tax rule may vary based on the state.
Why Are Taxes So Important in E-Commerce?
Taxes play a vital role in pricing and directly affect the cost of goods for the end customer. Proper tax setup allows you to:
- Comply with legal requirements and avoid fines;
- Transparently display prices to customers, enhancing trust;
- Optimize global sales by offering the correct price, including taxes, for each region.
Can You Sell Products Without Taxes?
Yes, PrestaShop provides the option to completely disable taxes. This can be useful if your business is VAT-exempt or operates in jurisdictions without applicable tax legislation for certain types of goods. Disabling taxes also simplifies price calculation for the customer if no taxation is required on your market.
Benefits of Tax Rule Configuration for International Sales
Using tax rules in PrestaShop allows you to effectively set up taxation for customers around the world. This gives you the ability to:
- Automatically apply different tax rates based on the customer’s location;
- Simplify tax management;
- Avoid errors that could lead to financial losses.
Conclusion
Proper tax and tax rule configuration in PrestaShop is not only a way to comply with legal norms but also an opportunity to improve customer interaction by offering transparent pricing and simplifying the purchasing process. It’s important to pay attention to every element of the setup, whether it’s displaying VAT in the cart or choosing the correct address for tax calculation.