How to configure Tax and VAT in WHMCS?

WHMCS is a well-known platform among web hosting companies and service providers for its capabilities to automate several aspects of a business and make the processes seamless. These processes can include customer signup, provisioning, management, support, to name a few.

Further, WHMCS also helps in automating the billing so that web hosts can focus on businesses, rather than manual and repetitive tasks.

For every business, configuration of tax and VAT (Value added tax) with their services, is very necessary. They need to specify some rules for tax, to charge along with the price of the service or product. This tax can either be inclusive (included in selling cost) or exclusive (additional on selling cost).

WHMCS is ready for these prospects as well. If you are an enterprise or individual looking to specify tax and VAT rules in WHMCS, then you are at the right place. The platform allows you to configure two separate levels of tax rules, so that you can ask customers to pay tax on the basis of state and country taxes.

Enabling tax support in WHMCS

Before you set up the tax rules in WHMCS, you will first need to enable Tax charges in WHMCS. This can be done by following the steps below:

  1. Visit Setup.
  2. Now go to Payments and hover over to Tax Rules.
  3. You will find an option named ‘Tax Enabled’. Tick the box to enable the tax support.
  4. Click on Save Changes.

You have now successfully enabled the tax in WHMCS.

Setting up Tax rules in WHMCS

To setup your specific tax zones, you will need to follow the next few steps.

  1. On the Tax Setup page, find the Add New Tax Rule tab and click on it.
  2. This will open a short form, which you will need to fill. The details needed to be filled in the form will include the Name, Country, State, and Tax Rate
  3. In the Name field, you need to fill the name for the tax zone which allows you to identify it.
  4. Next is the Country field, where you have the option to apply the tax rule to every country or any specific country.
  5. In the State field, you can choose whether to apply the tax rule for every state in the country or any specific state.
  6. Lastly, in the Tax Rate field, fill the rate of tax as a percentage. For instance, 17.5%.
  7. After filling the form and double-checking it, click on Save Changes button.

You have successfully set up the tax rule in WHMCS.

If you need to setup more tax rules, then it can be done easily be creating separate rules. WHMCS allows you to setup unlimited number of tax rules.

Tax Amount Calculation in WHMCS

In WHMCS Tax Rules panel, the tax is checked as Exclusive by default. This means that the tax will be calculated on the basis of tax rate you define in tax rules, and it will be added to the price of the product or service.

You can also choose inclusive tax option. This will mean that the price of product or service you are selling has already added tax on it.

The inclusive and exclusive taxes are calculated as below:

  • Inclusive Tax— Tax Amount = Price of service * (Tax Rate/100)
  • Exclusive Tax— Tax Amount = (Price of service /(100 + Tax Rate)) * Tax Rate

How to charge tax for specific products and services?

WHMCS is a flexible platform that allows you to charge tax for specific items. This means that you can charge tax for one item and not do it for another.

By default, no product is set to charge tax. You need to remember that you have specify the items for tax charge, or it wouldn’t be applied even if you have setup the tax rules.

Hence, follow the steps below to set a product or service as taxable in WHMCS.

  1. Visit Setup.
  2. Go to Products/Services and then to Product/Services.
  3. Every item in the list will have an edit icon next to it. Click the icon for the item you want to set tax.
  4. Tick the checkbox next to the item named ‘Tax Product’.
  5. Click on Save Changes.

Now the specified items will charge tax from customers, as set up in the tax rules.

Suggested reading: How to integrate Google Analytics in WHMCS?

Over to you:

Follow the methods mentioned in this article to easily configure tax in WHMCS. Take care of every step so that you don’t miss anything. If you have any query, feel free to let us know via the comments section below.

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