How to create a service item to process orders with international sales tax

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Learn how to create a service item linked to a sales tax payable account to process sales tax for marketplaces like Canada.

To process international sales tax, you’ll first need to create an account in the country’s currency. You should use Type: Other Current Liabilities and Detail Type: Sales Tax Payable for the account.

Then create a service item and link it to the sales tax payable account you just created.

After you’ve created the account and linked the service item, you’ll need to map this on SellerZen under the Taxes page.

We recommend that you track sales tax for each province in a separate service item and account. You can always use sub-accounts to group them. This allows for more detailed reporting.

Below is a step-by-step guide to walk you through the process.

Go to Account > New Account. Select “Other Current Liabilities” for the Type and “Sales Tax Payable” for the Detail Type.

Enter a descriptive name and make sure to select the correct currency type. You’ll have to delete/mark inactive and re-create another account if you forget this step.

Save the account and go to Sales > Products & Services to create a new service item.

Give it a name that you want to show on the invoice line item. For our example, we’ll use “Amazon CA Ontario Sales Tax” so that it’s clear.

Select the “Amazon CA Ontario Sales Tax” account you created earlier. Make sure you uncheck the “Is taxable” box.

Save the service item. 

Go to SellerZen and click on Integration and the marketplace to change the settings.

Click on the Taxes tab.

Under the International Sales Tax section, select the Province and service item. Make sure to save your setting.

Click on Add Additional Tax Rate to map more provinces or regions.

If you’re mapping the same service item to all provinces to lump them into the same account, then add additional tax rates for each province and save the same service item.

Otherwise, select the correct service item for each province. Don’t forget to save.

If you’ve made a mistake with the mapping, you can delete the mapping and re-add it.

Once you’ve mapped the sales tax, you can retry import for any transaction that has failed.

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