Marketplace taxes are a complex problem that varies from country to country. WC Vendors has two options when it comes to taxes for both the marketplace and the vendors. Depending on your location and tax requirements will depend on the option that is best suited for you.
- WooCommerce tax rates tables
- Automatic tax rates using TaxJar or Avalara
WC Vendors Tax Configuration
Once you have chosen the tax option that best suits you, you will need to configure both your tax settings and WC Vendors. WC Vendors provide the option to give calculated taxes to the vendor or for the marketplace to keep them. This option setting will determine if the taxes are given to the vendors and added to their commission entries in the Commissions table.
To configure how tax is distributed for commissions: Go to: WC Vendors > Settings > General. This is where you define who receives taxes on the marketplace.
This will give the whole tax amount to either the marketplace or the vendor. We currently do not support splitting the taxes between the vendor and the marketplace.
WooCommerce Tax Rates
If you are living in a country that doesn’t have complex marketplace tax compliance requirements, you can use the inbuilt tax system that comes with WooCommerce. This allows you to set your tax rates and have them applied to all products within the marketplace.
Please note
WooCommerce tax rates cannot use different address nexus for determining rates. For this reason, it must be assumed that the marketplace address and vendor address are the same nexus for calculations.
To access the tax settings screens, they first need to be enabled.
- Go to: WooCommerce > Settings > General.
- Select the Enable Taxes and Tax Calculations checkbox.
- Save changes.
Configuring Tax Options
To start configuring taxes, Go to WooCommerce > Settings > Tax. This tab is only visible if taxes are enabled.
The Tax tab displays several options that can be set to suit your needs — the settings you choose are based on the tax jurisdiction under which your store is located.
These settings are applied to all products on the marketplace. You can read up on what the various options mean on the WooCommerce documentation site.
Tax Classes
If you need to define different tax rates for different product types, states or other reasons, you can use tax classes that are then available for vendors to use on their product edit pages.
After adding this new custom rate, vendors will be able to apply this tax rate to that particular product from their product edit forms.
