> ## Documentation Index
> Fetch the complete documentation index at: https://docs.supercycle.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Charge types and tax

> Set the tax on a manual charge, and create reusable charge types that carry their own tax rate

Every charge carries a tax setting. On a one-off charge you set it yourself, and on a charge you raise often you can create a charge type that carries the setting for you.

| Charge        | Tax comes from                                                               |
| ------------- | ---------------------------------------------------------------------------- |
| **Custom**    | The **Tax** choice you make on the charge: your shop tax rates, or none.     |
| A charge type | The Shopify product behind the charge type, so it can carry a specific rate. |

Charge types are configured under <Icon icon="shopify" iconType="solid" /> **[Risk](https://admin.shopify.com/apps/supercycle/settings/risk)**.

<Note>
  Shopify calculates tax on a manual charge from your store tax settings and the customer's address, and doesn't take a rate supplied per line. That's why a custom charge is limited to shop rates or zero, and why a specific rate has to come from a product.
</Note>

***

## How it works

A custom charge becomes a custom line on the [draft order](https://help.shopify.com/en/manual/fulfillment/managing-orders/create-orders) that collects it, carrying the **Tax** setting you chose. A charge with a charge type becomes a line for that charge type's product variant, priced at the charge amount, so Shopify taxes it the way it taxes that product.

| Charge                           | Line on the draft order                                        | Tax                                                |
| -------------------------------- | -------------------------------------------------------------- | -------------------------------------------------- |
| Custom, **Apply shop tax rates** | A custom line for the amount                                   | Calculated by Shopify from your store tax settings |
| Custom, **No tax (0%)**          | A custom line, marked not taxable                              | None                                               |
| A charge type                    | The charge type's variant, with the amount as a price override | Taken from that product's Shopify tax settings     |

A line from a charge type also carries a **Charge type** attribute alongside the **Charge** and **SKU** attributes.

A charge takes a copy of its charge type's tax setting when the type is assigned, and that copy is fixed from then on. Editing a charge type later doesn't change charges already raised against it, and deleting one leaves its charges in place without the type.

<Warning>
  A charge set to **No tax (0%)** can only be collected through a draft order. **Charge to card** is unavailable while one is selected, because Shopify ignores the per-line tax setting on a billing attempt.
</Warning>

***

## Create a charge type

<Steps>
  <Step title="Open the Charge types section">
    Go to <Icon icon="shopify" iconType="solid" /> **[Risk](https://admin.shopify.com/apps/supercycle/settings/risk)** and find **Charge types**.
  </Step>

  <Step title="Add a charge type">
    Select **Add charge type**, enter a **Name** the charge is raised under, such as `Damage claim`, and an optional **Description**.
  </Step>

  <Step title="Set the tax">
    Set **Tax** to **Apply shop tax rates**, or to **No tax (0%)** for a tax-exempt charge such as a damage claim. Select **Save**.

    Supercycle creates an unlisted Shopify product with a single variant priced at `0.00`, marked not taxable when you choose **No tax (0%)**. The price on the product is never used, because the charge amount is applied as a price override when payment is collected.
  </Step>
</Steps>

Open a charge type from the list to edit its name, description, or tax setting, or to delete it.

***

## Set a specific tax rate

Supercycle only offers your shop rates or zero. Any other rate, such as a reduced VAT rate, comes from Shopify, applied to the product behind a charge type. Shopify calls this a [product tax override](https://help.shopify.com/manual/taxes/tax-overrides), and it applies to a collection rather than to one product, so the setup spans both admins.

<Steps>
  <Step title="Create the charge type">
    Add the charge type with **Tax** set to **Apply shop tax rates**.

    An override only applies to a variant that's taxable at all. A charge type set to **No tax (0%)** stays at zero whatever override you add.
  </Step>

  <Step title="Find the product in Shopify">
    Go to <Icon icon="shopify" iconType="solid" /> **[Products](https://admin.shopify.com/products)** and search for the charge type's name. Its status reads **Unlisted**, which keeps it out of storefront search, collection pages, and recommendations while it still behaves like an active product in carts, checkout, orders, and draft orders. That's where charges are collected, so the override still applies.
  </Step>

  <Step title="Add it to a manual collection">
    Create a collection, set its type to **Manual**, and add the charge type's product. Group charge types that share a rate into one collection, and use a separate collection for each rate.

    Overrides only work with products you add to a collection by hand. An automated collection doesn't qualify.
  </Step>

  <Step title="Add the override">
    Go to <Icon icon="shopify" iconType="solid" /> **[Taxes and duties](https://admin.shopify.com/settings/taxes)** and select the country you charge in. Under **Product overrides**, select **Add override**, select your collection and the region, enter the rate in **Tax rate**, and select **Add override**.

    The percentage you enter is the rate collected, not the amount exempted. Overrides are set per country or region, so repeat this for each one you raise charges in.
  </Step>

  <Step title="Raise a charge against the type">
    The charge is collected as that product's variant on a draft order, and Shopify applies the override rate instead of your standard rate.
  </Step>
</Steps>

<Note>
  Saving a charge type in Supercycle pushes its Shopify product again. Check the product is still in your override collection after you edit a charge type, and before you rely on the rate for a real charge.
</Note>

***

## Raise a charge against a type

When you [create a charge](/documentation/manage/charges/charge-actions#create-a-charge) from a cycle, **Charge type** lists **Custom** plus every charge type you've set up, with a type that carries no tax marked **(0% tax)**.

Select **Custom** to enter a one-off amount and set its **Tax** yourself. Select a charge type and the **Tax** choice doesn't appear, because the type brings its own setting. The charge page then shows **Charge type** and **Tax** on the charge.

The [Create charge](/documentation/manage/automation/automation#available-actions) Flow action takes a `taxable` field, on by default. A charge raised from Flow is always a custom line, so it can't use a charge type.

***

## Charge type FAQs

<AccordionGroup>
  <Accordion title="Why can't I enter a tax rate on the charge itself?">
    Shopify calculates tax on a draft order's custom lines from your store tax settings and the customer's address, and doesn't accept a rate supplied per line. The only per-charge control is on or off. Any other rate has to come from a product, which is what charge types are for.
  </Accordion>

  <Accordion title="Can I set a reduced rate on a custom charge?">
    No. A specific rate comes from a Shopify product tax override, and a custom charge has no product behind it. Create a charge type for that rate instead, then follow [Set a specific tax rate](#set-a-specific-tax-rate).
  </Accordion>

  <Accordion title="Do charge types show up on the storefront?">
    No. The products Supercycle creates for charge types are unlisted, so customers don't see or buy them directly. They're only used as the line item when you collect a manual charge.
  </Accordion>

  <Accordion title="I changed a charge type's tax setting, so why is an old charge unchanged?">
    The tax setting is copied onto the charge when the charge type is assigned, so a charge keeps the setting it was raised with. Only charges created after the edit pick up the new setting.
  </Accordion>

  <Accordion title="Does the tax setting affect the charge's invoice document?">
    Yes. A tax-exempt charge no longer shows a share of the paying order's tax, so the document for a damage claim reads as zero-rated.
  </Accordion>
</AccordionGroup>