Setup - Taxes & VAT

Cartloom lets you specify different tax rates for different countries. US Sellers can establish rates based on state and Canadian sellers can tax based on Province. Keep in mind that tax will ONLY be applied to products that are setup as TAXABLE products.

Tax Rules

Tax will only be charged to orders with billing (for digital orders) or shipping (for physical orders) addresses. You will utilize Tax Rules to establish what countries and state/provinces you must collect and remit tax for.

Apply Tax to Shipping
Some taxing authorities require that tax must be applied to order totals including the shipping amount. Enable this checkbox to tax the order total, including shipping.

Country Based
If you charge varying rates based on country, use Country Based rules.  Simply click the +Add button to add a new rule.  

• Country
  Select the country you would like to apply tax to.
• Title
  The title used as the label the buyer will see next to the tax amount during checkout.
• Rate
  The rate you wish to apply for this country rule. For example 20% would be 20.00

Example:

State / Region Based
Merchants in the US and Canada can setup rates on a per state or province basis.  

• Country
  Select the country you would like to apply tax to.
• Region (State)
  The State or Province where tax should be applied toward.
• Title
  The title used as the label the buyer will see next to the tax amount during checkout.
• Rate
  The rate you wish to apply for this country rule. For example 6.75% would be 6.75

Example:

VAT Settings

Accept VAT Number
When enabled, a VAT input will be displayed at checkout. When a valid VAT number is provided by the buyer, tax will be removed from the order total. The order will be saved with the VAT number for future verification and tax purposes.

VAT Verify Failsafe
Although Cartloom makes every attempt to verify the VAT number is valid, sometimes it fails. When it does, enabling this feature will accept VAT number regardless of whether we can verify or not.  

For businesses located within EU, we are checking the VAT number with the VIES system (the Europe official system for validating VAT numbers). When the VAT is not being validated, a failure might happen for two reasons:

1. The VIES system is down. From time to time it might happen that the validation system from your country or entire system to have some problems. In such situations, we cannot process your payment before the European Commission gets the system back to working state. Most of the times, this is a temporary thing and the problem is solved within minutes. You can check the status of the VIES system at anytime, by visiting their Self Monitoring report.
2. Although if the customer has a valid VAT number in their country, it might not be registered inside the European Union. To find out if the number is valid, you can always check it on the VIES website. For more details about this problem it is always best to contact your local authorities and ask for more details.