How to Configure Value Added Tax (VAT) in Magento 2

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Configuring Value Added Tax (VAT) from Magento 2 backend is a great solution in order to solve the conflict of the different VAT calculations, namely the store is located at different regions and the type of goods you provide are products, materials, or services. With VAT functionality, you can create the data management table that contains your country, VAT rate, customer types, and so on.

Configuring VAT in Magento 2 allows you to comply with existing rules, manage your cost better, as well as become more professional. Therefore, today, I want to show you all steps to configure and apply the VAT quickly on your Magento 2 store.

Configure Value Added Tax (VAT) in Magento 2:

Configure Customer Tax Class

  • On the Admin Panel, Stores > Taxes > Tax Zones and Rates.
  • Make sure that a customer tax class is available for the VAT such as Retail Customer. If you have not created one yet, tap the Add New to add it.

Configure Product Tax Class in Magento 2

  • On the Admin panel, Stores > Tax > Product Tax Classes.
  • Hit the Add New button and create three new classes:
    • VAT Standard
    • VAT Reduced
    • VAT Zero
  • Hit the Save Class button for each new class that you add.

Set Up Tax Zones and Rates

  • On the Admin menu, Stores > Tax > Manage Tax Zones & Rates.
  • Click on the Add New Tax Rate button and complete all necessary information as needed.
  • Save Rate to apply the new rate.

Configure Tax Rules

A tax rule is a combination of a customer tax class, a product tax class, and a tax rate.

  • On the Admin Panel, Stores > Tax > Manage Tax Rules.
  • Complete all required information as you need for the new tax rule.
  • Save Rule to apply the new rule.

Plus Tax Class to Products

  • On the Admin Panel, Products > Products > Catalog.
  • In the product list, find the needed product and open it in the edit mode.
  • On the left panel, under General, select General.
  • Set the Tax Class to VAT Class that applies to the product.
  • Click Save to complete.

VAT is an essential part when conducting any type of business, and it may differ based on the locations or the product type. However, you can configure VAT in Magento 2 with ease following the above guide. Also, it is possible to add tax to the total price as an extra fee. If you need to read more about tax-related issues, we have the related links below for you. Any questions or comments can be added in the box and we will reply to it as soon as possible.

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