Automatic Tax Calculation for Shipping in VAT Countries
NetSuite supports automatic tax calculation for shipping items and methods in countries with VAT. This feature follows the pattern of automatic tax calculation used for goods taxation
Shipping and handling are considered taxable and follow this tax calculation logic only if set as taxable on the related nexus record. To make sure they are set as taxable, leave the Make Shipping and Handling Not Taxable box on the customer record unchecked. For more information, see Setting Up Nexus Preferences.
For example, if an entity default tax code or nexus default tax codes apply to the transaction, they also apply to the shipping method or item.
This feature also uses the regular lookup logic for goods. The diagram below shows that shipping and handling follow the same direction as goods.