Selling internationally means dealing with different tax systems: VAT in Europe, GST in Australia, sales tax in the US, and more. Getting it wrong can mean fines and unhappy customers. This guide covers tax automation for WooCommerce.

Understanding Tax Types

VAT (Value Added Tax)

Used in EU, UK, and many other countries. Included in displayed prices (usually). Rates vary by country and product type.

GST (Goods and Services Tax)

Used in Australia, New Zealand, Canada, India. Similar to VAT but implementation varies.

US Sales Tax

Complex: varies by state, county, and city. Only charged if you have nexus (presence) in that jurisdiction. Thousands of possible rates.

WooCommerce Tax Configuration

Basic Setup

WooCommerce includes basic tax functionality: define tax classes, set rates by location, choose tax-inclusive or exclusive pricing.

Limitations

Built-in tax is manual. For multi-country selling, you need: automatic rate updates, nexus tracking (US), and tax report generation.

Tax Automation Solutions

TaxJar

Focuses on US sales tax. Automatic rate calculation, nexus tracking, and filing assistance. Good WooCommerce integration.

Avalara AvaTax

Enterprise solution for global tax. Handles US, EU, and international. More complex setup but comprehensive coverage.

Quaderno

EU-focused with VAT MOSS support. Good for digital products and services.

EU VAT Considerations

VAT MOSS

For digital products sold to EU consumers, VAT MOSS lets you report all EU VAT through one country.

OSS (One-Stop Shop)

Replaced VAT MOSS in 2021. Expanded to cover physical goods too.

Reverse Charge

B2B sales within EU use reverse charge – buyer accounts for VAT.

Implementation Steps

1. Identify where you have tax obligations
2. Choose tax automation solution
3. Configure WooCommerce tax settings
4. Test checkout with various locations
5. Set up reporting and filing workflow

Tax compliance is complex. Contact us for help setting up your tax automation.