Create and manage VAT settings
Who is this article for?
Account owners or team members with account & settings permissions. Set permissions in Square Dashboard.
About VAT settings
Square offers flexible tax management for both in-person and online orders. When calculating VAT, the system applies your designated VAT rate to the total price of taxable items in each order.
Before you begin
You can create sales taxes from your Square Dashboard and Point of Sale app.
DISCLAIMER: Although Square provides tools that help you efficiently create and manage taxes, we cannot guarantee the applicability and accuracy of our tax tools. We also cannot offer tax advice or consulting services. It is solely your responsibility to accurately configure, charge, collect and remit applicable taxes on your orders. To ensure taxes are applied and filed correctly for your specific business needs, we recommend consulting a tax adviser.
Step 1: Create VAT
- Sign in to Square Dashboard and go to Settings > Account & Settings > Payments > VAT.
- Click Create tax.
- Under Details, enter a tax name and rate, and select the locations where the rate applies.
- Under ‘Tax application’, click the drop-down menu and choose either All current and future taxable items at selected locations, or Select items to choose specific items to apply the rate to. If an item is set as non-taxable, taxes won’t be automatically applied to the item on any in-person or online orders.
- Toggle Apply VAT to custom amounts on to apply the tax to any custom amounts added to the basket.
- Under ‘Tax calculation’, choose either Additive tax to add the tax as a separate line item on your customers’ receipts, or Inclusive tax to include the tax in the item price.
- Under ‘Tax exemption’, toggle Add exemption rule on to specify when this tax should not be applied.
- Click Save.
- From your Point of Sale app, tap ≡ More > Settings > Checkout > VAT.
- Tap + to create a new tax.
- Enter a tax name and rate.
- Under ‘Tax application’, tap either All items and services (current and future), or Select items to choose specific items to apply the rate to. If an item is set as non-taxable, taxes won’t be automatically applied to the item on any in-person or online orders.
- Toggle Custom amounts on to apply the tax to any custom amounts added to the basket.
- Under ‘Calculation method’, choose either Additive tax to add the tax as a separate line item on your customers’ receipts, or Inclusive tax to include the tax in the item price.
- Tap Save.
Step 2: Manage VAT for online fulfilment
When setting up VAT for delivery and pickup orders, you can manually configure VAT. Manual rates are not available for QR code orders. VAT can also be applied to delivery fees.
- Sign in to Square Dashboard and go to Settings > Account & Settings > Payments > VAT.
- Under ‘Delivery and pickup tax overrides’, click Manage settings.
- Under ‘Delivery sales tax’, choose from the following:
- Manually apply taxes based on destination (click Manage manual tax rates to set up your manual rates)
- Apply default VAT
- Do not collect taxes
- Under ‘Additional settings’, optionally Exempt delivery fees from tax.
- Under ‘Square Online QR code sales’, click Apply default rates for QR code VAT.
- Under ‘Square Online pickup sales’, choose from the following:
- Manually apply taxes based on destination (click Manage manual tax rates to set up your manual rates)
- Apply default rates for pickup VAT
- Under ‘Tax calculation method’, choose either Additive tax to add the tax as a separate line item on your customers’ receipts, or Inclusive tax to include the tax in the item price.
- Click Save.
When setting up VAT for shipping and non-physical orders, you can manually configure VAT. VAT can also be applied to shipping fees.
- Sign in to Square Dashboard and go to Settings > Account & Settings > Payments > VAT.
- Under ‘Shipping and non-physical tax overrides’, click Manage settings.
- Under ‘Domestic shipping and non-physical sales taxes’, choose from the following:
- Manually apply taxes based on destination (click Manage manual tax rates to set up your manual rates)
- Do not collect taxes
- Under ‘International shipping and non-physical taxes’, click Manage international tax rates.
A. Click Add tax rate and choose a country from the drop-down menu.
B. Enter a Country Tax Rate (%) and customer-facing Tax Name.
C. Click Save > Done. - Under ‘Additional settings’, optionally Exempt delivery fees from tax.
- Under ‘Tax calculation method’, choose either Additive tax to add the tax as a separate line item on your customers’ receipts, or Inclusive tax to include the tax in the item price.
- Click Save.
Disable or delete sales taxes
You can disable or delete your VAT rates at any time from either your Square Dashboard or Point of Sale app. Disabling a tax makes it no longer applicable to purchases. If you delete a tax, you cannot undo the deletion, and you will have to create the tax again.
- Sign in to Square Dashboard and go to Settings > Account & Settings > Payments > VAT.
- Select the tax you want to disable or delete.
- Click Actions, then Disable tax or Delete tax.