Tax Classes
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      Tax Classes

      Available for Hub Logistics Light, Medium, and Big licenses and Hub Inventory Small, Midsized, and Huge licenses.

      Introduction

      Although marketplaces typically cater to end consumers, some B2B Customers (i.e., companies) may request an invoice.

      Deciding which VAT rate to apply can be complex, which is where the concept of a Tax Class comes in.

      In this article, we address a complex topic related to taxation, for which MarketRock is equipped.

      For any further details, you must consult your tax advisor, as this article should not be construed as advice that MarketRock is qualified to provide.

      We will cover the following topics in this order:

      What is a Tax Class

      A Tax Class is a list that indicates the VAT rate applied by each individual country.
      For example, a Tax Class may include a list as follows:

      • Italy 22%
      • Germany 19%
      • France 21%
      • All other countries 0%

      Having one or more such lists results in having one or more Tax Classes.

      For example, you might create a list named "Food Tax Class" and another named "Electronics Tax Class."

      In the first list, you would detail for Italy a rate of 10%, and for the second, 4%.

      Associating each Product you sell with the correct Tax Class allows MarketRock to determine which VAT rate to apply in every circumstance.

      On MarketRock, a default Standard Tax Class exists for European countries, with VAT at 22% for Italy, 19% for Germany, 20% for France, etc.

      Regardless of the Tax Class, the Prices you set for Products listed on MarketRock are always gross. The Tax Class helps to understand, for each country and product, the VAT rate to be applied to that gross price, extracting it when necessary.

      VAT Calculation

      The VAT rate applied to an Order depends on the following factors:

      • Type of Product
      • Type of Customer
      • Destination country
      • Storage country of the goods

      You will know the Product type, Customer type, and the country where the goods will be shipped as soon as the Order is placed.

      The country where the goods are stored, however, depends on the location of the Warehouse you choose to ship from. For this reason, the VAT rate to be applied becomes clear when the Shipment is finalized and ready to dispatch.

      In the case of a multiple Order (i.e., composed of several Products), the VAT rate may differ for each item line.
      For a simple example, an Order from a B2B customer containing two Products—a smartphone and a book—shipped to Italy from an Italian Warehouse will have two different rates (22% for the smartphone and 4% for the book).

      Applying the Tax Classes

      Each Product must be associated with two Tax Classes: one for B2C Customers and one for B2B Customers.

      To assign Tax Classes to a Product, simply go to the Products screen, click the Edit button, and populate the two fields "B2C Tax Class" and "B2B Tax Class."

      Any Product without a specified Tax Class will have the Standard Tax Class applied.

      Applying Tax Classes in bulk

      To bulk-edit Products, you can use the Simple Import function. However, modifying Tax Classes is not supported at this time.

      Adding Tax Classes

      If you sell Products in different categories and the standard Tax Class does not suffice for managing all Orders requiring invoicing, you can add as many Tax Classes as needed by clicking on Settings > Tax Center.

      From there, you can fill out the "Generic" section by entering the (internal use) name of the Tax Class.

      By clicking on the Rates tab, you can add the country and the rate applied for sales in that country. Click Add to confirm and Save to complete the process.

      When MarketRock Tax Classes are used

      If the marketplace provides VAT information ...

      Tax Classes and MarketRock Licenses

      When using MarketRock Tax Classes to determine the VAT rate to apply to an Order, the Standard Tax Class is always available.

      This means that if you have a Hub Logistics license and the Standard Tax Class meets all your needs, your license can remain unchanged.

      If, on the other hand, you need to add more Tax Classes, you will need to purchase a Hub Inventory license to apply Tax Classes to each Product.

      Adding Tax Classes other than the Standard one is only supported with Hub Inventory licenses.