Taxes and VAT

Every store has its own tax model. A store with VAT-inclusive prices and a store that adds sales tax at checkout are set up differently. Set yours in Settings → Store & tax → Tax.

Why tax is removed from revenue

Tax you collect is owed to the tax authority. It is not income. With Subtract collected tax from revenue on, net revenue leaves out the tax collected, net of tax refunded. This is Marginful's profit basis.

Example: an order of $118 including 18% VAT has $18 of tax. Net revenue is $100.

VAT on costs

If you enter costs including VAT and your business can recover input VAT, turn on both VAT settings for costs. Marginful divides those costs by (1 + VAT rate) so profit uses the cost without VAT. If input VAT is not recoverable, it stays in the cost.

Gift cards

A gift card sold is something you owe: the customer gets goods later.

• At redemption (recommended): selling a gift card is not revenue. Revenue is counted when the card is used to buy products. Gift cards sold appear separately as Gift card sales.
• At sale: the gift card counts as revenue when sold. To avoid counting it twice, the amount later paid with that card is treated as a discount.

The incl. / excl. VAT switch

On Today, Profit, P&L and Orders you can switch the revenue figures shown between including and excluding VAT. The switch only changes how revenue is displayed. Net profit, margins and every stored number stay the same.

The switch appears when a selected store charges VAT. It is hidden when you view several stores that use different settings.

Comparing with Shopify reports

When your prices include tax, Marginful shows Gross sales, Discounts, Returns, Net sales and Shipping charged as they were charged, so these amounts contain VAT. Shopify's sales reports show the same lines without VAT, so Marginful's figures for these lines look higher by about your VAT rate. These lines carry a small incl. VAT label in the P&L, the Orders table, the profit waterfall, the metric descriptions and in exports. When you view several stores and only some of them have prices that include tax, the label reads incl. VAT where applicable.

The label never changes a number. Net revenue and net profit are always after VAT while Subtract collected tax from revenue is on. To match Shopify's total sales, subtract the taxes from it. Then account for refunds, which Marginful counts on the order's date and Shopify counts on the day they are processed. See Refunds and returns.