International Tax Guidelines

U.S. Tax Configuration

Tax Option recommended setting
Load catalog prices Excluding tax
FPT No, because FPT is not taxed.
Tax based on Shipping origin
Tax Calculation On total
Tax shipping? No
Apply Discount Before tax
Comment All tax zones are the same priority; ideally, a zone for state and one or more zones for zip code lookup.

UK B2C Tax Configuration

Tax Option recommended setting
Load catalog prices Excluding tax
FPT Yes, including FPT and description
Tax based on Shipping address
Tax Calculation On total
Tax shipping? Yes
Apply Discount Before tax, discount on prices, including tax.
Comment For merchants marking up supplier invoices (including VAT).

U.K. B2B Tax Configuration

Tax Option recommended setting
Load catalog prices Excluding tax
FPT Yes, including FPT and description
Tax based on Shipping address
Tax Calculation On item
Tax shipping? Yes
Apply Discount Before tax, discount on prices, including tax.
Comment For B2B merchants to provide simpler VAT supply chain considerations. Tax calculation on row is also valid; however, check with your taxing jurisdiction. Setup assumes a merchant is in the supply chain and that goods sold are used by other vendors for VAT rebates and so on. This makes it easy to discern tax by item for faster rebate generation. Note that some jurisdictions require different rounding strategies not currently supported by Magento, and that not all jurisdictions allow item or row level tax.

Canada Tax Configuration

Tax Option recommended setting
Load catalog prices Excluding tax
FPT Yes, including FPT, description, and apply tax to FPT.
Tax based on Shipping origin
Tax Calculation On total
Tax shipping? Yes
Apply Discount Before tax
Comment Merchants located in a GST/PST province (Montreal) should create one tax rule and show a combined tax amount. Be sure to consult a qualified tax authority if you have any questions. For information about the tax requirements of specific provinces, see the following:
Revenu Qu├ębec
Government of Saskatchewan
Manitoba Information for Vendors