If your business is located in Canada, you can enable automatic tax rates for your online store. Lightspeed eCom will then generate the appropriate taxes, based on each customer's shipping location.

We don't recommend having manual and automatic taxes configured at the same time. To ensure you're charging the correct taxes, we recommend contacting your government or a tax specialist.

Lightspeed eCom's automatic tax feature is built with the complete database of applicable taxes for each province, including GST/PST, GST/QST, GST only and HST only. Also, its automatic tax feature is designed according to Canada's destination tax model.

This means that Lightspeed eCom correctly defines the tax rate for the destination province of any order. For example, a merchant in Ontario sells to a customer living in British Columbia. Lightspeed eCom will charge the customer British Colombian taxes.

If you are not required to collect taxes for specific products, you will need to add your products to a tax class and override the taxes charged for these products. For more information, click here.

Entering your address

1. In your eCom Back Office, select Settings > Company.
2. Scroll to the Contact information section.
3. Beside Choose a country to display the relevant fields: select Canada.
4. Enter your address. The Zip code field will support your postal code.
5. Click Save.

Enabling automatic taxes

1. In your eCom Back Office, select Settings > Taxes.
2. Under Tax Settings, toggle on All prices exclude tax.
3. To ensure taxes appear in your cart and checkout, toggle on Show tax in cart, and Show tax in checkout.
4. Ensure the option for Tax rate for new products is set to Calculate taxes automatically.
5. Under Automatic Tax Rates, select Change country selection.
6. From the list of countries, select Canada. The country is added to your automatically calculated tax rates.
7. Optionally, select Edit to view the tax rate for each province.

Changing automatic taxes by creating a tax override

Depending on your products and your location, you may have tax exemptions. For example, in Canada, many medical supplies are not taxed.

You can create tax classes to identify products that have particular tax rate or exemption. Then you can use tax overrides to specify how much tax customers should pay for those products.

We recommend checking with the province or a tax specialist to for more information about tax exemptions.

Creating a tax override for individual items

1. Enable automatic tax rates.
2. On the left menu of the Back Office click Settings > Payment Settings > Taxes.
3. Click Canada.
4. From Tax Classes click Add a tax class.
5. Give the tax class a name, such as Children's clothing.
6. Click the tax class you created.
7. Navigate to Products. Click Add products.
8. Click Choose beside each product to add them to the tax class. When you've chosen all your items, close the window.
9. Click Save.
10. From Settings > Payment Settings > Taxes > Canada.
11. Navigate to Tax overrides. Click Add a tax override and select the tax class you created.
12. Click the tax override and apply appropriate tax settings.
13. For each province that you want to apply the override to, enter a rate, and optionally change the name and tax type:
    
    • Combine with the federal tax adds the rate to the country's rate.
    • Replace the federal tax entirely replaces the federal tax rate.
    • Compounded with the federal tax: applies federal tax to the subtotal, then the tax override is applied.

Creating a tax override for a group of items

1. Enable automatic tax rates.
2. On the left menu of the Back Office click Settings > Payment Settings > Taxes.
3. Click Canada.
4. From Tax Classes click Add a tax class.
5. Give the tax class a name, such as Children's clothing.
6. Click on the new tax class.
7. Enable Create a group of products.
8. Select Include all products if you're adding all your products in your shop to this tax class. Otherwise, select Include a group of products. From there, use the filter to find items to add to the group.
9. If there are any products you want to exclude from the tax class, scroll down to Exclude Products and click Add products to select products.
10. Click Save.
11. From Settings > Payment Settings > Taxes > Canada.
12. Navigate to Tax overrides. Click Add a tax override and select the tax class you created.
13. Click the tax override and apply appropriate tax settings.
14. For each province that you want to apply the override to, enter a rate, and optionally change the name and tax type:
    
    • Combine with the federal tax: add the rate to the country's rate.
    • Replace the federal tax: entirely replaces the federal tax rate.
    • Compounded with the federal tax: the federal tax is applied to the subtotal, then the tax override is applied.

Disabling tax overrides

For periods of time that a tax override is not required, turn off a tax override once it's created.

1. In your eCom Back Office click Settings> Taxes.
2. Select Canada.
3. Under Tax overrides, click the tax override you want to disable.
4. In the section Tax class, toggle off Enable tax override.

What's next?