How To Configure Taxes In Magento 2: A Beginner’s Guide

Ipad on Macbook Pro Beside Apple Magic Mouse

If you are an eCommerce business, it is essential to make sure that you collect taxes correctly. With Magento 2, you can set up your taxes in a straightforward way. This article will guide you on how to configure taxes in Magento 2.

Speed Up Your Magento Store by 300%

Step 1: Go to the Magento 2 Admin Panel

The first thing to do is to log in to the Magento 2 Admin Panel.

Step 2: Set up Tax Zones

Tax zones represent geographical areas and the tax rates applied in those areas.

To set up Tax Zones, go to Stores > Taxes > Tax Zones and Rates.

After that, click on the Add New Tax Rate button and fill in the Fields accordingly. Then save your changes.

Step 3: Set up Tax Rules

Magento 2 allows you to create tax rules based on Product Classes, Customer Classes, and Tax Zones.

To set up Tax Rules, go to Stores > Taxes > Tax Rules.

After that, click on the Add New Tax Rule button, and fill in the Fields according to your Business needs.

  • Rule Information Section:

    • Name and Description: Set up a name and description for your Tax Rule.
    • Customer Tax Class: Select the applicable Customer Tax class.
    • Product Tax Class: Select the applicable product Tax Class, which is determined when you create a product.
  • Conditions Section:

Conditions allow you to specify which products the tax rule applies to based on product attributes.

  • Action Section:

The Action section allows you to set up the tax rate for the specified condition.

- **Priority:** Allows you to specify the priority of a rule when multiple tax rules apply to the same items.
- **Calculate Tax Based On:** Allows you to select if tax will be calculated on product price inclusive of tax or exclusive of tax.
- **Tax Rate:** Choose the previously created tax rate to assign to this rule.

After you have completed the fields, click on the Save Rule button to save your changes.

Step 4: Set up Default Tax Configuration

Magento 2 allows you to set up a Default Tax Configuration that will be applied automatically to your customers.

To set up the default tax configuration, go to Stores > Configuration > Taxes.

This configuration applies to all of your products by default unless you have created specific tax rules.

  • Tax Classes Section:

In the Tax Classes section, you can set up your applicable Customer and Product tax classes.

  • Calculation Settings Section:

In the Calculation settings section, you can set up if your prices are displayed inclusive of taxes or exclusive of taxes, Default Country, Default State.

  • Default Tax Destination Calculation Section:

In this section, you can set up the default destination of your tax calculation.

After setting up your Default Tax Configuration, save your changes.

Conclusion

Setting up Taxes in Magento 2 is very straightforward, and with the above guide, you should be able to set up your Taxes with ease. It is essential to make sure your taxes are correctly set up, and Magento 2 ensures you do this.

Scroll to Top