1. Types of Taxes
  2. Application of Taxes
  3. How to configure Taxes
  4. Examples Cases

Types of Taxes

Difference per Country and Region

Taxes are different in every country, so if you are planning to sell your products in various countries and regions, you can set Taxes with respect to that particular Country and Region.

For example, in some countries of Europe, it is mandatory to display the VAT price on every order. You can read more about VAT Basic rules for Europe.

Shipping or Billing address

When selling internationally, different countries can often have different requirements with percentages of taxes. You have the option to apply taxes according to the country of the Shipping address or to the country of the Billing address.

For example: John, living in Portugal wants to buy wine online from a Portuguese store but he doesn’t own a credit card. So he asks a friend from the USA to pay for the order with their Credit Card. In this case, the shipping address will be Portugal, while the billing address will be the USA. The taxes in both countries are likely to differ on the purchase of wine. Hence the seller has to define if the buyer should pay taxes based on Portugal or based on the USA.

Difference per Category

A scenario can emerge where different products have different taxes, which is why you have the options to set a tax per Category of Product. Alternatively, you can also set a generic tax to “All Categories”, however, this tax will accumulate with any other tax specified for different categories. Furthermore, you can add the “Shipping Tax” for a specific country and/or region.

For example, in Portugal, the VAT of wine is 13%, while books have a 6% VAT.

Percentage Value or Fixed Value

When setting taxes for products in your store, you can set them either with a Percentage Value or a Fixed Value.

For example, if a product worth 150€ has a tax of 14%, the tax for that can be set as either “14%” or “21€” (14% of 150€).


Application of Taxes

With a Jumpseller store, the application of taxes can be varied in two ways:

  1. Add the Tax after the purchase (Tax not included in product price)
  2. Include Tax in the price of the product (Tax included in product price)


  1. Add the Tax after the purchase

    By implementing this method, the Tax will not show within the selling price of the product. It will be visible once a visitor makes a purchase and goes to the checkout page.

    For example:
    1 product (Listed Price on the Product) - 100€
    Tax 23% (Not included in the Listed Product Price) - 23€
    Subtotal - 100€
    Total (Price at Checkout) - 123€

  2. Include Tax in the price of the product

    This is when you want to include the tax in the product selling price, which is usually the popular methodology to apply when pricing products. This way, the listed price shown is the final price of the product with the taxes included.

    The tax is calculated by using the formula Tax = (Tax Rate X Price) / (1 + Tax Rate).

    For example:
    1 product (Listed Price on the Product) - 100€
    Tax 23% (Included in the Listed Product Price) - 18.69918699187€
    Subtotal - 100€
    Total (Price at Checkout) - 100€


How to configure Taxes

To configure Taxes for your store:

  1. Go to the admin panel of your Store, from the sidebar go to Settings and click on Taxes.

  2. Under the “Tax based on” section, define for which address you want to base your tax on - it can either be the Shipping address or the Billing address (each address can be in different countries).

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  3. You have the option to add different tax percentages or fixed tax amounts i.e. Taxes can be added as per:

    • Country
    • Region
    • Categories:
      • Product Categories
      • All Categories
      • Shipping

    You will have to insert the percentage of tax per category before adding this changes to the table.

    For example; We added 13% of taxes on Wine, for the country “Portugal” and, more specifically to the region “Porto”.

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    When the taxes are excluded of the selling price, the customer would get an overview of the Subtotal, the Shipping price and the Taxes (13%) all calculated separately. This is what the checkout would look like:

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Examples Cases

Use Case #1: Pisco Bottle (Chile)

Product Price: 5.000 CLP
Tax 1 (19%) - 950 CLP (normal VAT)
Tax 2 (31.5%) - 1.575 CLP (alcoholic drink)
Total - 7.525 CLP

This can be configured as:

  • 1 general tax applied to all categories, which will accumulate with any other configured tax (19%)
  • 1 specific tax applied to the alcohol category (31.5%)

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Use Case #2: Products with lower taxes (or even 0%)

In Portugal, almost everything has 23% IVA, but some products are only taxed at 6%.

In Chile, coffee is not taxed. That would be configured as:

  • All categories would need to have their tax specified
  • The “Coffee” category would be set with 0%

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Use Case #3: Aguardiente Bottle (Colombia)

In Colombia, besides the normal VAT tax, alcohol has 2 more taxes: 1 is applied to hard alcoholic drinks in general, while the last one is calculated based on the amount of alcohol in the drink. This value can then be perceived as a fixed number since the amount of alcohol in a drink doesn’t change.

Product Price 20.000 COP
Tax 1 (5%) - 1.000 COP (normal VAT)
Tax 2 (31.5%) - 6.300 COP (alcoholic drink)
Tax 3 (fixed value, not %) - 5.800 COP (200 COP x 29 alcohol degrees)
Total Price: 33.100 COP

This can be configured as:

  • 1 general tax applied to all products, which will accumulate with any other configured tax (5%)
  • 1 specific tax for this type of alcohol category (31.5%)
  • 1 specific tax for the same category, but with a fixed value which reflects an amount charged per quantity of alcohol in the drink (5.800 COP)

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If you have any questions regarding all of this, you may contact us any time and we will be happy to assist you.