Canada: Example Tax Configuration
The following example shows how to set up GST tax rates for Canada and PST tax rates for Saskatchewan, with tax rules that calculate and display the two tax rates. Because this is an example configuration, be sure to verify the correct tax rates and rules for your tax jurisdictions. When setting up taxes, set the store scope to apply the configuration to all applicable stores and websites.
- Fixed product tax is included for relevant goods as a product attribute.
- In Quebec, PST is referred to as TVQ. If you need to set up a rate for Quebec, make sure to use TVQ as the identifier.
Step 1: Complete Tax Calculation Settings
| 1. | On the Admin menu, select System > Configuration. Then in the panel on the left, under Sales, select Tax. |
| 2. | Click to expand each section, and complete the following settings: |
-
Tax Calculation Settings Field
Recommended Setting
Tax Calculation Method Based On
Total
Tax Calculation Based On
Shipping Address
Catalog Prices
Excluding Tax
Shipping Prices
Excluding Tax
Apply Customer Tax
After Discount
Apply Discount on Prices
Excluding Tax
Apply Tax On
Custom Price (if available)
-
Tax Classes Field
Recommended Setting
Tax Class for Shipping
Shipping (shipping is taxed)
-
Default Tax Destination Calculation Field
Recommended Setting
Default Country
Canada
Default State
(as appropriate)
Default Postal Code
* (asterisk)
-
Shopping Cart Display Settings Field
Recommended Setting
Include Tax in Grand Total
Yes
Display Full Tax Summary
Yes
Display Zero in Tax Subtotal
Yes
-
Fixed Product Taxes Field
Recommended Setting
Enable FPT
Yes
All FPT Display Settings
Including FPT and FPT description
Apply Discounts to FPT
No
Apply Tax to FPT
Yes
Include FPT in Subtotal
No
Step 2: Set Up Canadian Goods & Services Tax (GST)
To print the GST number on invoices and other sales documents, include it in the name of the applicable tax rates. The GST will appear as part of the GST amount on any order summary.
-
Manage Tax Zones & Rates Field
Recommended Setting
Tax Identifier
Canada-GST
Country
Canada
State
* (asterisk)
Zip/Post is Range
No
Zip/Post Code
* (asterisk)
Rate Percent
5.0000
Step 3: Set Up Canadian Provincial Sales Tax (PST)
Set up another tax rate for the applicable province.
-
Tax Rate Information Field
Recommended Setting
Tax Identifier
Canada-SK-PST
Country
Canada
State
Saskatchewan
Zip/Post is Range
No
Zip/Post Code
* (asterisk)
Rate Percent
5.0000
Step 4: Create a GST Tax Rule
To avoid compounding the tax and to correctly display the calculated tax as separate line items for GST and PST, you must set different priorities for each rule, and select the “Calculate off subtotal only” checkbox. Each tax appears as a separate line item, but the tax amounts are not compounded.
-
Tax Rule Information Field
Recommended Setting
Name
Retail-Canada-GST
Customer Tax Class
Retail Customer
Product Tax Class
Taxable Goods
Shipping
Tax Rate
Canada-GST
Priority
0
Calculate off subtotal only
Select this checkbox.
Sort Order
0
Step 5: Create a PST Tax Rule for Saskatchewan
For this tax rule, make sure to set the priority to 0 and select the "Calculate off subtotal only" checkbox. Each tax appears as a separate line item, but the tax amounts are not compounded.
-
Tax Rule Information Field
Recommended Setting
Name
Retail-Canada-PST
Customer Tax Class
Retail Customer
Product Tax Class
Taxable Goods
Shipping
Tax Rate
Canada-SK-PT
Priority
1
Calculate off subtotal only
Select this checkbox.
Sort Order
0
Step 6: Save and Test the Results
| 1. | When complete, click the Save Config button. |
| 2. | Return to your storefront, and create a sample order to test the results. |
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