Understanding Tax Calculations for Different Countries

When it comes to selling products, it's important to understand how taxes are calculated for different countries. In this article, we will break down the tax calculations for two common tax types of

In countries like the USA the Goods and Services Tax (GST) is applied to products sold. The tax is not included in the product directory, so it's important to understand how it affects the selling price.

The selling price for products in these countries will appear without tax. This means that the price listed on the purchase order will not include the GST. However, state & local taxes are still factored into the overall selling price calculation at the time of sale.

Please bear this in mind when discussing or quoting clients on products and services.

The formula for calculating the selling price (without tax) is as follows:

This means that the cost of goods sold (cogs) and the supplier tax (GST) are added together, and then the markup is applied to determine the final selling price.

In the USA, sales tax paid on purchases (input tax) is not reclaimable. It is considered part of the cost of goods

It's important to note that the supplier discount is not used in this calculation.

Only the cost of goods sold, and the supplier tax are factored into the selling price; however, the supplier tax amount is calculated based on the discounted COGS.

📌Coming Soon: Selling prices across the platform will display without tax.

This includes the Product Directory and Service List.

Canada has multiple sales tax types. The amount of sales tax charged varies depending on the province or territory in which the purchase is made.

The Goods and Services Tax, or GST, is a federal tax that is applied to most goods and services sold in Canada. Some provinces have combined the GST with their provincial sales tax (PST) to create a harmonized sales tax (HST).

The Provincial Sales Tax, or PST, is a tax that is collected by the provinces and territories in Canada. The rate of PST varies depending on the province or territory, ranging from 5% to 10%. Some provinces have combined the PST with the GST to create a harmonized sales tax (HST).

The Harmonized Sales Tax, or HST, is a combined tax that includes both the GST and PST. This tax is only applicable in certain provinces, including Ontario, New Brunswick, Nova Scotia, Newfoundland and Labrador, and Prince Edward Island.

The Quebec Sales Tax, or QST, is a provincial tax that is collected by the province of Quebec. The current rate of QST is 9.975%.

The formula for calculating the selling price (including tax) is as follows:

This means that the cost of goods sold (cogs) and the markup are added together, and then the product tax (VAT) is applied to determine the final selling price.

It's important to note that the supplier discount is not used in this calculation.

In countries like Europe and South Africa, the Value Added Tax (VAT) is applied to products sold. Unlike GST, the VAT is included on the purchase order as well as the product directory, so the selling price will appear including tax.

The formula for calculating the selling price (including tax) is as follows:

It's important to note that the supplier discount is not used in this calculation.

If you are not registered to pay tax and have your Company Fiscal settings aligned, this may affect your selling price calculations.

This is because the clinic is not charging tax, nor can the tax paid to your supply be recouped.

To ensure that your pricing reflects this the supplier tax paid must be included.

It's important to note that the supplier discount is not used in this calculation; however, the supplier tax amount is calculated based on the discounted COGS.

Understanding how taxes are calculated for different countries is crucial for accurately pricing products and avoiding any discrepancies. By following the formulas outlined in this article, you can ensure that your selling prices are accurate and compliant with tax regulations in different countries.