Merchants that use a PSP business model (2Sell, 2Subscribe packages) are required to handle their own taxes (both calculation and remittance to local authorities) according to local fiscal laws. 2Checkout offers a tax calculator service for PSP merchants, to make sure they are compliant with local fiscal laws.
Tax Calculator is available for merchants that use the PSP business model (2Sell, 2Subscribe packages). For eligibility and activation Contact 2Checkout for more details.
Merchants will receive the collected taxes from 2Checkout and further declare and pay them themselves. Thus, 2Checkout will calculate, collect and transfer taxes to PSP merchants for them to remit to local fiscal authorities.
Merchants who want to activate this feature can send an email request to the 2Checkout Financial Operations department and they will need to submit a file with all the taxes they want to collect. 2Checkout will apply the taxes according to the file received. It is the responsibility of the merchant to update the file according to changes that might incur at country level.
2Checkout will determine the sales taxes or VAT value per order, collect them and further include the collected taxes in the payout/settlement with the merchant.
Merchants will be able to see detailed reporting on tax calculation through the Order Export functionality (available in the 2Checkout Merchant Control Panel, as shown in the image below), Account Balance section in the 2Checkout Merchant Control Panel, through APIs per order, Payout Report, and Netsuite.
The attributes that can be configured for the PSP tax calculator are based on country and/or Zip Code and include:
- VAT instant validation (through VIES)
- Product type and additional items added to the order - impacting the tax computation (e.g. IOT product together with a gift)
- Mandatory information can be collected (e.g. CIF in Brazil, GST in India and Australia)
- GST, ABN, VAT (other than EU) are validated against our internal rules
There are no special actions that merchants need to set on their side. The merchant navigates to the 2Checkout Merchant Control Panel, adds a new product and generates a new buy-link for the product using the Generate link option. All price-related features will still apply and taxes will be applied in the exact same way as when 2Checkout collects and remits taxes.
VAT/Sales tax display
The collected taxes are displayed in any Control Panel report once 2Checkout starts collecting them and merchants will be able to see what taxes were collected on any order.
The option to display VAT/ Sales tax is also available on each report template.
Tax exemption will be applied if tax cart validation rules are met. For example, if a German B2B shopper with a valid VAT ID places and order, in the checkout process the VAT will no longer be applied, as shown in the images below.