How to Manage Orders with Custom Tax Calculation in Magento 2

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When it comes to selling products online, one of the most important aspects to consider is tax calculation. In Magento 2, default tax calculation can be set up based on various rules and rates. However, there may be situations where you need to apply custom tax calculation for certain products or customers. In this article, we will discuss how to manage orders with custom tax calculation in Magento 2.

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Setting Up Custom Tax Calculation Rules

Before we get into managing orders with custom tax calculation, let’s first talk about how to set up custom tax calculation rules in Magento 2. Here are the steps:

  1. Go to Stores > Taxes > Tax Rules in the Magento 2 backend.
  2. Click on ‘Add New Tax Rule’ button.
  3. Fill in the ‘Tax Rule Information’ section:
    a. Enter a name for the tax rule.
    b. Set the ‘Tax Rate’ to ‘Custom Tax Rate’.
    c. Enter the percentage amount for the custom tax rate.
    d. Select the ‘Customer Tax Class’ and ‘Product Tax Class’ for which the custom tax rate should be applied.
    e. Set the ‘Priority’ of the tax rule (if applicable).
  4. Click ‘Save Rule’ to save the new tax rule.

Now that we have set up a custom tax calculation rule, let’s see how it can be applied to orders.

Applying Custom Tax Calculation to Orders

When a customer places an order in your Magento 2 store, the default tax calculation will be applied based on the tax rules and rates that have been set up. However, if you want to apply custom tax calculation to an order, you can do so by creating an invoice with the custom tax rate. Here are the steps:

  1. Go to Sales > Orders in the Magento 2 backend.
  2. Find the order for which you want to apply custom tax calculation and click on it to open the order.
  3. Click on ‘Invoice’ button to create a new invoice for the order.
  4. In the ‘Invoice Totals’ section, you will see the default tax calculation based on the tax rules and rates that have been set up.
  5. To apply custom tax calculation, click on ‘Add New Tax’ button.
  6. Fill in the ‘New Tax’ section:
    a. Select the tax rule that you want to apply.
    b. Enter the amount of tax that should be applied based on the custom tax rate.
    c. Select the tax rate, if applicable.
    d. Select the item(s) to which the custom tax rate should be applied (e.g. specific products or customers).
    e. Click on ‘Add Tax’ button to add the custom tax calculation to the invoice.
  7. Check the ‘Invoice Total’ to make sure that the custom tax calculation has been applied correctly.
  8. Click on ‘Submit Invoice’ button to save the invoice.

That’s it! The custom tax calculation will now be applied to the order and the invoice will reflect the updated tax calculation based on the custom rate.

Conclusion

Managing orders with custom tax calculation in Magento 2 is a simple process that can be done by following the steps outlined above. By setting up custom tax calculation rules and applying them to orders, you can ensure that your customers are charged the correct amount of tax based on their location, customer group, or product type. If you have any questions or need further assistance, don’t hesitate to reach out to the Magento 2 support team.

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