WooCommerce is the leading solution for ecommerce stores with 28% market-share. According to the latest sources, it has been downloaded over 5 million times in 2021 alone.
It continues to be a popular choice because it is free, and also easy to use if your site already runs on WordPress.There are also a ton of plugins to help with virtually any kind of ecommerce related task..
One of the tasks you will want to use a plugin for is calculating taxes, as this can be tedious if done manually. Below are some great plugins that make the job easier.
They help you perform various functions like configuring taxes, optimizing the shipping details, integrating analytics etc, while also accounting for differences in various countries and tax jurisdictions--one of the important differences is whether you are allowed to include tax in the listed price. 1. Official WooCommerce Tax Services
The Official WooCommerce Tax Services is the official extension that helps calculate taxes automatically. It is powered by Jetpack and is currently used by businesses from 30 different countries including Spain, France, Germany, the UK, Australia, Canada, and the US.
It uses the TaxJar WooCommerce API, which we talk about more below. While this plugin supports about 30 countries, it will only support a single tax location based on the store.
This means that if you have more than a single store in different locations (or tax jurisdictions), you will require a separate WooCommerce plugin.
If you want to utilize this automated tax service, you will have to install both the WooCommerce Services plugin and Jetpack on your store. This plugin is free. 2. YITH WooCommerce EU VAT
It is an EU-focused tax plugin for your WooCommerce online shop. Using this plugin, you can charge the proper VAT based on the customer's country.
Additionally, it provides support for the taxation on digital products based on the new EU tax rules implemented in 2015. All the EU tax rates can be imported quickly so that you save time. You will also find support for B2B and B2C sales, which have different tax rates under the EU rules.
For easy handling, you can also ask the shoppers for their VAT information and location. This way, you will compare the answers against the IP address or geolocation to ensure that they are a match.
Also, the plugin will help you create the MOSS report for different periods and countries; The price starts at €70 for one store. 3. TaxJar
TaxJar is a SaaS (Software as a Service) product that aids in calculating taxes automatically. As mentioned previously, the Service Tax Tool for WooCommerce is itself powered by the TaxJar API.
However, the TaxJar plugin offers much more than what WooCommerce Service Tax Tool offers for USA-based stores.
Apart from helping you collect taxes from different users, this WooCommerce tax-exempt plugin also allows you to track and file state sales tax automatically for each of the the states where you owe taxes, which is exceptionally helpful for US-based stores.
Additionally, the plugin can also provide you with state-level rates and offer rooftop tax calculations. Overall, it has information for 14,000 tax jurisdictions.
TaxJar also offers insights from Economic Nexus so that you can check whether or not you have crossed the economic threshold in the states where you ship your products.
In short, the difference between TaxJar and Official WooCommerce tax services is that the latter is a free tool that makes use of the TaxJar API while the former requires payment but is much more feature rich.
TaxJar plans start at $19 for up to 200 orders per month, and come with a free 30 day trial. 4. EU/UK VAT Compliance Assistant for WooCommerce
It's a WooCommerce tax plugin designed for stores located in the UK. With the help of this plugin, you can collect variable VAT for your digital products, depending on the country from where the purchase originates. This has become quite important since the new EU tax rules were updated in 2015.
You can use this plugin to identify the location of the shoppers based on the shipping/billing address and/or the IP address. This plugin will then store this information so that you can show it during audits.
This plugin also allows you to update/import VAT rules for all countries in Europe with a single click. It uses the customer’s geo-location to accurately show prices that include the proper VAT and various other taxes as soon as they visit your online store.
Since it is 'Brexit-ready,' this plugin supports both the UK and EU once the Brexit transition period has expired.
Overall, this is the perfect plugin if you are selling to customers from the UK or EU. The plugin has free WooCommerce support but the premium version costs £35. 5. WooCommerce AvaTax
AvaTax is almost similar to TaxJar – this WooCommerce sales tax plugin focuses on stores based in the US. However, there may also be some other products that you can use to target different regions. AvaTax calculates taxes on the rooftop level and easily supports roughly 12,000 tax jurisdictions.
This plugin has been designed to calculate taxes precisely. However, it also provides various other services like handling compliance, filing taxes, etc. For instance, you can file tax payments with the help of Avalara Returns.
While the plugin is free to use, you will need to have a premium Avalara account to use the services. The pricing of Avalara ranges from $99 to $349, depending on the location and the requirements. Final Thoughts
While you can use the numerous free tutorials on how to calculate and assess taxes in WooCommerce these plugins will save you lots of time. After all, you didn’t start an ecommerce business to learn arcane details about thousands of different tax jurisdictions.
The plugins let your customers have a great shopping experience, and eliminate hassle and worry for you, the store owner, as they are fully compliant with the local laws.
Any thoughts? Let us know in the comments!
Contributed by Emily Moore. Emily is an English & programming teacher with a passion for space and blogging.