Get B2B tax and VAT right
By default, SparkLayer shows B2B prices excluding tax, whatever your store's tax setting. On the Review & Pay step, it asks your platform for the tax and shows it as its own line. Tax goes wrong, for example VAT added twice, when the prices going in already include it.
Before you start
- Your tax rates, for example 20% VAT, and whether any products are taxed differently.
- Which customers are tax-exempt, if any.
- Whether you use a tax app, such as Avalara or TaxJar.
Set up tax
Check whether your store prices include tax
Shopify only
In your Shopify admin, go to Settings,Taxes and duties (opens in your Shopify admin in a new tab). Under Global settings, see whether Include sales tax in product price and shipping rate is ticked. If it is, your Shopify prices include tax (gross).
BigCommerce, Wix, WooCommerce, Magento only
Set tax up in your platform, then check its limits in Set up tax on other platforms. For example, on Wix, tax exemptions only apply when the customer pays by card through the Wix checkout.
See How it works for net and gross prices.
Make your price lists net
| Price list | What to do |
|---|---|
| Manual | Upload prices excluding tax (ex VAT). |
| Automatic, based on tax-inclusive Shopify prices | Work out a percentage that also takes the tax out, and enter it by hand. See Tax-inclusive prices for how. |
Open the list at Pricing,Price lists (opens in your SparkLayer Dashboard in a new tab), change it and click Save. Take the 1-minute tour.
Make tax-exempt customers exempt
Shopify only
In your Shopify admin, open the customer, click Manage tax exemptions, untick Collect tax and click Save. If you use a tax app such as Avalara or TaxJar, exempt them there too (in Avalara, add them to the Exemption Customer List with their Shopify customer ID as the Customer Code): the two work independently. See Make a customer tax-exempt.
BigCommerce, Wix, WooCommerce, Magento only
Set the exemption in your platform's customer settings. See Set up tax on other platforms.
A tax-exempt customer still sees net prices, and pays no tax at checkout.
Handle products with different tax rates
Shopify only
Optional. By default, tax is charged on the cart subtotal. If your products have different rates and Shopify's prices include tax, contact our support team to turn on line item tax. To stop charging tax on a product, untick Charge tax on this product on it. See Charge different tax rates on different products.
BigCommerce, Wix, WooCommerce, Magento only
Set product tax rates in your platform's tax settings.
Show prices with tax, if your buyers expect it
Optional. Turn on Tax-inclusive prices at Settings,Configurations,Pricing and cart (opens in your SparkLayer Dashboard in a new tab) and add a display_tax_rate column to your price CSV, such as 10 for 10% GST. Buyers see gross prices labelled "inc. tax", but you still upload and charge net. It only works on manual price lists: see Show tax-inclusive prices. Take the 1-minute tour.
Sell to VAT-registered businesses in the EU
Shopify only
A common setup for EU B2B sales: show net prices, add VAT at checkout, and zero-rate VAT-registered customers in other EU countries under the reverse charge.
- Show net B2B prices. Upload prices excluding VAT to a manual price list, or adjust an automatic one. See Make your price lists net.
- Collect VAT in each EU country you sell to. In Settings,Taxes and duties (opens in your Shopify admin in a new tab), check the Collecting tax column for each country. VAT is then added on Review & Pay.
- Make reverse-charge customers tax-exempt. For each VAT-registered EU customer who shouldn't pay VAT, open them in Shopify, click Manage tax exemptions, untick Collect tax and click Save. See Make a customer tax-exempt.
- Test it. Place a test order as a VAT-registered customer and as one who pays VAT, and check the Tax line on each.
Shopify also charges VAT on shipping in the EU and the UK. See Why is tax charged on shipping?
Check it worked
Place a test order as a B2B customer, using a product whose price you know:
- The product page and cart show the net price, the same as the price list.
- On Review & Pay, Tax is its own line, at your rate, and the Total is the net price plus tax once.
- As a tax-exempt customer, Tax is zero.
- On the order in your store, the prices and tax match the checkout.
If something's not right
These fixes are for Shopify. On other platforms, check your platform's tax settings and its limits.
- VAT or tax is charged twice. Upload manual price lists excluding tax, and if your Shopify prices include tax, make sure each automatic price list's percentage also takes the tax out. See Make your price lists net.
- Tax shows as zero, or VAT is missing at checkout. Check the customer isn't tax-exempt (Manage tax exemptions on the customer in Shopify, with Collect tax ticked), the product has Charge tax on this product ticked, and you collect tax in the country of their shipping address: in Settings,Taxes and duties (opens in your Shopify admin in a new tab), find the country and check its Collecting tax column. If those are right, check the customer record's default address, then place a test order as the customer.
- An exempt customer is still charged. A tax app such as Avalara or TaxJar overrides Shopify's settings, so exempt the customer in both. In Avalara, for example, add them to the Exemption Customer List with their Shopify customer ID as the Customer Code. See Tax is charged but I use a third-party tax app.
- Tax is charged on shipping. In Canada, the EU, the UK and the US, Shopify taxes shipping whatever its settings say. See Why is tax charged on shipping?
- Order prices differ from the checkout. The checkout uses whichever is lower, the SparkLayer price or the Shopify price, and that comparison includes tax: if the SparkLayer price after tax is higher than your tax-inclusive Shopify price, the Shopify price is used. Compare the variant's price at Pricing,Price editor (opens in your SparkLayer Dashboard in a new tab) with its Price in Shopify. See Prices on the Shopify order don't match the SparkLayer checkout.
For every tax question, see Troubleshooting in Tax and shipping.
Next steps
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