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

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 stages and the type of goods you provide are products, materials, or services. With VAT functionailty, you can create the data management table that contains your country, VAT rate, customer types, and so on.

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 Classes
• Configure Product Tax Classes
• Configure Tax Zones and Rates
• Configure Tax Rules
• Plus Tax Classes to Products

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.

Related topics

• Create a New Tax Rate in Magento 2
• Setup Fixed Product Tax
• Setup Tax Rules for Magento 2
• Configure Canadian Tax in Magento 2
• Magento 2 Configure EU Tax
• Configure US Tax in Magento 2
• Import & Export Tax Rates in Magento 2
• How to include extra Tax classes in Magento 2
• How to Configure SEO