# Set up taxes

> Tax classes, place-based rate overrides on the geography records, and the EU VAT flags.

Source: CBX documentation, version 3.x (released). Canonical page: https://docs.configbox.at/docs/admin-guide/commerce/set-up-taxes. Last updated 2026-08-01.

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> **Audience:** store admins · **Scope:** tax classes + the geography screens · **Last reviewed:** 2026-07-20

**What this does** — Sets what tax is charged, where. Two pieces cooperate: **tax classes** (named
rate buckets like *Standard* and *Reduced* that products, shipping and payment surcharges point
at) and the **geography records** (which can override a class's rate per place). For most stores
this is a fifteen-minute, set-once job.

## How the rate is found

For each order line, CBX takes the line's **tax class** and looks for that class's rate at
the customer's place, most specific first:

> **City → County → State → Country → the class's default rate.**

Two country flags trump the chain: **VAT free** (no VAT for orders to this country) and **In EU
VAT Area** (enables EU B2B handling — a valid foreign VAT ID makes the order reverse-charge, and
the order prints the "tax liability is shifted" note).

## Steps

1. **Define the classes.** Open **Settings** → the embedded **Tax Classes** manager. Each class
   has a **Name** and a **Default Tax** rate — the fallback when no place overrides it. One
   *Standard* class is enough for many stores; add *Reduced* etc. only if you sell mixed-rate
   goods.
2. **Set place-specific rates where needed.** Open **Countries**, open a country:

   ![The country form with its Tax Override section](./img/country-edit.jpeg)

   - **Tax Override** — enter this country's rate for any class (leave empty to inherit the
     class default).
   - **VAT free** / **In EU VAT Area** — the special-case flags described above.
   - **Zones** — which shipping zones the country belongs to (that's for
     [shipping](https://docs.configbox.at/docs/admin-guide/commerce/set-up-shipping), managed here for convenience).
   - The same Tax Override section exists on **States**, **Counties** and **Cities** for
     region-level taxes (US-style setups); populate only the levels you actually need — the
     address form shows only populated levels.
3. **Point things at classes.** Products (per pricing section), shipping methods and payment
   surcharges each carry a **Tax Class** field — that's the whole wiring.

## What happens next

Checkout resolves each line's rate from the buyer's address (before an address is known, the
**Default Country** from **Settings → Checkout** is assumed — set it to your home market so
walk-in visitors see the right prices). Whether prices *display* net or gross follows the
customer group's **B2B/B2C** mode; the resolution above decides what is *charged*.

## Good to know

- **Check the reverse-charge path** if you sell B2B in the EU: a test order with a valid foreign
  VAT ID should come out tax-free with the shifted-liability note on the order.
- The customer's VAT ID lives on their [customer record](https://docs.configbox.at/docs/admin-guide/orders/manage-customers); whether
  the field is shown/required per flow is the **Customer Fields** matrix.
- Rates changed here apply to **new** carts immediately; placed orders keep their snapshotted
  tax.
- A missing shop country (fresh installs) is flagged on the **Dashboard** — fix that before
  anything else tax-related.