Setting Up Tax for International Sales: A Step-by-Step Guide

Tax compliance is one of the most daunting aspects of selling internationally. Different countries have different rules, different rates, and different filing requirements. This guide breaks it down into manageable steps.

Understanding the Basics

• VAT (Value Added Tax): Used in the EU, UK, and many other countries. Typically 15-25%. You charge VAT on sales to consumers in countries where you are registered.
• GST (Goods and Services Tax): Used in Australia, Canada, India, and others. Similar to VAT but with different rates and thresholds.
• Sales Tax: Used in the US. Rates vary by state, county, and even city. You only collect in states where you have "nexus" (physical or economic presence).

Registration Thresholds

Most countries have a threshold below which you do not need to register for tax. For example, the UK VAT threshold is 85,000 pounds. The EU has country-specific thresholds for distance selling. Research the thresholds for your target markets.

Setting Up in Axnify

Navigate to Settings, then Tax Configuration. Enable tax calculation for the regions you sell to. Axnify supports automatic rate lookup based on customer shipping address. You can set prices as tax-inclusive or tax-exclusive depending on your market conventions.

Display Considerations

In the UK and EU, prices displayed to consumers must include VAT. In the US, prices are typically shown without sales tax (added at checkout). Axnify handles both conventions — configure it in your tax settings.

Record Keeping

Keep detailed records of every transaction including the tax collected, the rate applied, and the customer location. Axnify exports this data in your order reports. Consult with a tax professional for filing requirements in each jurisdiction.