config-sales-tax-calculation-settings

Step 2: Complete the Calculation Settings

1. Click to expand the Calculation Settings section. Then, do the following:

a. In the Tax Calculation Method Based On field, select whether the tax is based on the
price of each unit, or on the “row total” (that is, the total for a line item in the order,
accounting for any discounts).
b. In the Tax Calculation Based On field, select whether the tax is calculated based on the
customer’s shipping address, billing address, or your store’s shipping origin.
2. To determine which prices include tax, do the following:
a. Set Catalog Prices to include or exclude tax.
b. Set Shipping Prices to include or exclude tax.
3. In the Apply Customer Tax field, select whether tax is applied to the original or discounted
price.
4. In the Apply Discount on Prices field, select whether any discounts applied include the tax or
exclude it.
5. In the Apply Tax On field, select whether tax is applied to custom prices or to original prices.
6. In the Enable Cross Border Trade field, select “Yes” to use consistent pricing across different
tax rates, or select “No” to vary the price by tax rate.
Important! If cross-border trade is enabled, the profit margin changes by tax rate. Profit is
determined by the formula (Revenue – CustomerVAT – CostOfGoodsSold). To enable cross-border
trade, set prices to include tax.

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