From In-Portal User Manual

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Taxes

This section allows the administrator to setup automatic VAT (or Sales Tax) calculation for the online store. The taxes are specified by zones, much like the shipping destination zones, described in the manual.
The taxes are calculated by In-commerce automatically, when the order is places through the storefront or the Administrative Console. The amount of taxes is determined based on the shipping destination, or billing address if shipping is not available. The address is used to locate a tax zone, from which the percentage is taken. This percentage is then applied to the pre-shipping order subtotal. If multiple zones list the same address, the lowest tax value will be taken. The store administrator is responsible for collection of the taxes, and their proper reporting to the local tax authorities.
In this list, you can add, modify, delete and clone the tax zones.