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Setting Up Dynamic Tax-Inclusive Pricing for Multiple Markets (Coming Soon)

To meet the shopping preferences of different countries and regions, SHOPLINE offers a dynamic tax-inclusive pricing feature for multiple markets. Depending on the customer’s location, the system automatically displays product prices as either tax-inclusive or tax-exclusive.

For example, customers in Germany are accustomed to seeing tax-inclusive prices at checkout, while customers in the United States typically see prices with taxes calculated separately. Once this feature is enabled, the system automatically adjusts the display format based on the customer’s market.

In this guide, you’ll learn what tax-inclusive and tax-exclusive pricing mean and how to enable dynamic tax-inclusive pricing for multiple markets. This helps you match local shopping preferences, comply with tax regulations, and create a smoother shopping experience for your customers.

Note: This feature is currently in beta testing. Please stay tuned for its official release.

 

 

Understanding Dynamic Tax-Inclusive Pricing with Examples

When you enable dynamic tax-inclusive pricing, the system automatically adjusts whether product prices include tax based on the customer’s location, aligning with local shopping preferences.

Here’s an example for a store based in the United States selling to multiple markets:

Scenario: Your store is based in California, USA, where state sales tax is around 9.5% and prices are typically tax-exclusive. You also sell to customers in the United Kingdom (UK), Mainland China (CN), and Hong Kong (HK).

If your product’s net price is set to USD 100 (excluding tax), here’s how it would display in each market:

  • California, USA (Tax-exclusive market, state sales tax approx. 9.5%)

The product page displays the net price of USD 100 (tax excluded). At checkout, the system automatically adds about 9.5% sales tax based on the buyer’s location, making the final payment approximately USD 109.50.

  • United Kingdom (Tax-inclusive market, VAT 20%)

Both the product page and checkout show the price including 20% VAT, calculated as: Price = Net Price × (1 + Tax Rate) = 100 × 1.20 = USD 120.

  • Mainland China (Tax-inclusive market, VAT 13%)

Both the product page and checkout show the price including 13% VAT. Using the formula: Tax = (Tax Rate × Price) ÷ (1 + Tax Rate), the tax-inclusive price is about USD 113.00, with a net price of roughly USD 100 and tax of about USD 13.

  • Hong Kong (Tax-free market)

Hong Kong has no VAT or sales tax. Both the product page and checkout show USD 100, with no additional tax applied.

 

 

Enabling Tax-Inclusive Pricing for Multi-Market Products

Follow these steps to enable tax-inclusive pricing for products across multiple markets.

Notes: 

  • If you’re not familiar with the general tax setup process, we recommend first reviewing our Setting Up and Managing Taxes for Your Store guide.
  • For taxable products, make sure to enable the Tax required option on the product details page. Then, enable tax-inclusive pricing and configure the general tax settings as needed. Otherwise, the system may not calculate and collect taxes correctly.

 

Enabling and Setting Up Tax-Inclusive Pricing

  1. From your SHOPLINE admin panel, go to Settings > Markets. Select the market you want to set taxes for.

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  2. In the Store settings section, click Manage next to Taxes and fees.

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  3. You’ll be directed to the Taxes and fees page, where you can configure settings related to taxes. In the upper right corner, enable Tax-inclusive pricing settings to include taxes in your product prices.

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  4. Click View example to preview how taxes will appear on your storefront across different pages.

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  5. Click Manage rules to open the tax settings page.

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  6. On the Tax-inclusive pricing rules settings page, search for the desired country or region, choose to apply Tax-inclusive pricing rules, and enter the applicable tax rate.

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  7. Click Save to apply your changes. 

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Note: For products or campaigns managed through third-party apps, prices will be calculated based on the tax-inclusive pricing rules once they reach the cart and checkout pages.

 

Calculation Example

After enabling this setting, the product prices you enter in market pricing will be treated as tax-inclusive. See the example below to understand how tax is calculated in practice.

Example: For a product priced at 100 GBP with a tax rate of 10%:

  • Retail price: 100 GBP
  • Tax-inclusive price: 100 + (100 × 10%) = 110 GBP

If you also enable general tax calculation, meaning that when tax-inclusive pricing is enabled, tax settings are also active, the system will automatically calculate and adjust taxes based on the configured country/region-wide tax rates, state taxes, or other applicable rates. This means the tax-inclusive price will dynamically adjust according to the customer’s shipping address, ensuring accurate tax calculation and compliance.

Example:
For a product priced at 100 GBP with a 10% tax rate, a region-wide tax rate of 10%, and shipping fee of 10 GBP:

  • Retail price: 100 GBP
  • Tax-inclusive price: 100 + (100 × 10%) = 110 GBP

If the customer buys 1 item:

  • Order amount: Tax-inclusive product price × quantity + shipping fee = 110 × 1 + 10 = 120 GBP
  • Shipping Tax: (Shipping fee ÷ (1 + shipping tax rate)) × shipping tax rate = (10 ÷ (1 + 10%)) × 10% ≈ 0.91 GBP
  • Region-Wide Product Tax: (Tax-inclusive product price ÷ (1 + region-wide tax rate)) × region-wide tax rate = (110 ÷ (1 + 10%)) × 10% = 10 GBP
  • Total tax: Shipping tax + Region-wide tax = 10.91 GBP