Wix Ecommerce Tax Setup Simplified

Learning Objectives

By the end of this chapter, you'll be able to:

1. Set up automatic tax calculations in your Wix store
2. Create manual tax rates for specific regions when needed
3. Configure VAT and sales tax for international customers
4. Ensure your tax setup meets legal requirements
5. Test and verify your tax settings work correctly

Introduction

Setting up taxes in your Wix store doesn't have to be complicated. Whether you're selling locally or internationally, getting your tax configuration right from the start saves headaches later and keeps your customers happy at checkout.

Most new store owners worry about getting taxes wrong, but Wix provides solid tools to handle the heavy lifting. You can use automatic calculations for most situations, or create custom rates when you need more control. We'll walk through both approaches and show you how to test everything works properly.

Lessons

Setting Up Automatic Tax Calculations

Wix's automatic tax feature handles most of the work for you. It calculates taxes based on your business location and where your customers are buying from.

Here's how to turn it on:

1. Go to your Wix dashboard and click 'Settings'
2. Select 'Taxes' from the menu
3. Toggle on 'Automatic Tax Calculation'
4. Enter your business details including your registered address
5. Choose which products are taxable (most physical goods are, digital products vary by location)
6. Save your settings

The system will now calculate appropriate tax rates for each order based on shipping addresses. This works well for UK VAT, US state taxes, and most other common tax scenarios.

Check your settings monthly to make sure they're still accurate, especially if tax rates change in your area.

Creating Manual Tax Rates

Sometimes you need more control over tax rates. This might be because you have tax-exempt customers, special rates for certain products, or you're selling in areas where automatic calculation doesn't work perfectly.

To set up manual rates:

1. In your Taxes settings, click 'Add Custom Tax Rule'
2. Choose the geographic area this rule applies to
3. Enter the tax rate as a percentage
4. Select which products or categories this affects
5. Set whether tax is included in your displayed prices or added at checkout
6. Save and test with a sample order

Manual rates override automatic calculations for the areas you specify. You can have multiple rules running at once, but make sure they don't conflict with each other.

Configuring International Tax Settings

Selling internationally means dealing with different tax systems. The EU has VAT, the US has state sales tax, and other countries have their own rules.

For international setup:

1. Research tax requirements for each country you sell to
2. In Wix, go to Taxes and select 'International Settings'
3. Add each country where you need to collect tax
4. Set the appropriate rates (19% for German VAT, for example)
5. Configure whether you're registered for tax in each location
6. Set up tax-inclusive or tax-exclusive pricing by region

If you're VAT registered in the EU, you'll need to collect VAT from EU customers but not from customers outside the EU. Wix can handle this automatically once you configure it properly.

Keep records of your international tax setup. You'll need this information for tax returns and if authorities ask questions.

Testing Your Tax Setup

Before you start selling, test your tax configuration thoroughly:

1. Create test orders from different locations
2. Check that tax appears correctly at checkout
3. Verify the amounts match what you expect
4. Test with different product types (physical goods, digital products, services)
5. Try orders from tax-exempt locations if applicable

Use Wix's preview mode to test without creating real orders. You can also create test products that you remove before going live.

This is the bit most people miss, but it's crucial. Better to catch tax errors before customers do.

Practice

Create a test scenario for your store:

1. Set up automatic tax calculation for your main selling region
2. Add a manual tax rule for one specific area (perhaps a different rate for a nearby region)
3. Place test orders from both locations using Wix's preview feature
4. Check that the correct tax rates apply in each case
5. Verify the total amounts and tax breakdowns look right

Try this with different product types if you sell both physical and digital goods.

FAQs

How accurate is Wix's automatic tax calculation?
Wix uses current tax databases and updates rates regularly. It handles standard scenarios well, but always verify rates for your specific situation, especially for unusual products or business types.

Can I show prices with tax included?
Yes, you can choose whether to display tax-inclusive or tax-exclusive prices. This is particularly useful for UK stores (where prices usually include VAT) versus US stores (where tax is typically added at checkout).

What happens if I sell to a tax-exempt customer?
You can create specific tax rules for exempt customers or regions. Set up a manual rule with a 0% rate for these situations.

How do I handle returns and refunds for tax?
Wix automatically adjusts tax amounts when you process refunds through the platform. The tax portion gets refunded along with the product price.

Do I need to register for tax in every country I sell to?
This depends on your sales volume and local laws. Generally, you only need to register once you exceed certain thresholds. Check requirements for each country or consult a tax advisor.

Jargon Buster

Automatic Tax Calculation – Feature that works out tax amounts based on customer location and your business settings, without you having to calculate anything manually.

Manual Tax Rates – Custom tax percentages you set for specific regions or products, overriding automatic calculations.

VAT (Value Added Tax) – Tax system used in the UK and EU, typically included in displayed prices rather than added at checkout.

Sales Tax – Tax system common in the US, usually added to the total at checkout rather than included in listed prices.

Tax-Inclusive Pricing – Showing prices with tax already included (common in UK/EU).

Tax-Exclusive Pricing – Showing prices before tax, with tax added at checkout (common in US).

Wrap-up

You now have the tools to set up taxes properly in your Wix store. Start with automatic calculation for your main market, then add manual rules where you need them. Remember to test thoroughly before launching, and keep an eye on tax rate changes in your selling regions.

Next, we'll look at setting up shipping options to complement your tax configuration.

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