Firstly
we must state that the shopping cart software is not an accounting
program and thus, it's settings may be different than one, although
settings have been developed with the advice of professionals in tax,
retail and shipping. The following will explain some details to how tax
is calculated over the shipping component of a sale.
Shipping is sold in the same way as a product within your checkout. It
is essentially purchased by the merchant and then on-sold to the
customer, just like a product. It is not a sale from the shipping
company direct to your customer. For this reason, the merchant may set
any price for the shipping on international orders. The tax component of shipping is then deducted for international orders during the checkout. If
your shipping company is not charging tax for international shipping by
default, it is best to add the equivelant tax to international shipping
from your admin settings to compensate for the deduction during the
checkout process.
Whilst in some countries this suits standard tax rules and in some, this may not, there's currently only one option available.
*Please seek the advise of accounting or tax professionals if required.
The above explanation is not given as part of a paid service and your
circumstances may vary.
