I'm selling products which are subject to different tax rates in the same taxable country

Modified on: Mon, 1 Nov, 2021 at 7:12 PM

Scope

Is it possible to show one plan's price with Inclusive VAT and the other with exclusive VAT?


Summary

Chargebee saves all your Tax settings under an initial profile, called "Primary" profile.

If you are selling a single category of products and don't need to apply different tax rates, you can maintain this single ‘primary' Tax Profile, with the tax rates configured across the countries you are planning to sell.

However, if you are selling products across different categories (like digital and physical goods for example), and require different tax rates to be applied to different products, in the same country, then you can create different tax profiles to cater to the different products/rates.

Solution

Let's assume you are running ABC Solar company and selling the following products in Europe and the UK:

  • ‘Solar Monthly Digest' (online magazine) - 20% Tax in UK
  • ‘Solar Panel installation services' - 5% Tax in UK

This section will walk you through how to create two tax profiles in Chargebee using the ABC Solar use-case.

Step 1: Configure Multiple Tax Profiles

Step 2: Name the Tax profile (to match the product category you will map this with)

Once the required Tax profiles are added, you can view the profiles in the Taxable regions added. Since ABC Solar has to apply the EU's tax rates, here's the EU tax page:

You can provide the rates for each profile, as per the sample taken,

  • Profile 1: 20% Tax applicable for sales of ‘Solar Monthly Digest' (online magazine)
  • Profile 2: 5% Tax applicable for sales of ‘Solar Panel installation services'

Finally, you can map the Tax profile to the particular product or products it concerns.

Step 3: Map a Profile to a Product/Add-on

Once a profile is created, you can map the profile to the appropriate Products/Services.

Note: If you create only one profile, it will be automatically mapped to your product catalog. In case you have enabled more than one profile, he DEFAULT profile will be mapped to all products. You can edit a different Tax profile and save. Based on the tax settings saved, the tax rate will be applied for the subscription.



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