When selling to consumers one rule applies: the price they see must be the price they pay. Any plus VAT at the end is a surprise that kills orders. Here is the setup. (Note: this is a WooCommerce how-to, not tax advice — consult your accountant for your status.)
Enabling
WooCommerce → Settings → General → tick Enable taxes. A new Tax tab appears.
The key decision
In Tax → Prices entered with tax:
- Yes, I will enter prices inclusive of tax — recommended for consumer sales: you enter the final price and Woo calculates the base and the VAT for the invoice
- No, I will enter prices exclusive of tax — for B2B catalogs where net prices are the norm and tax is added at the end
Mixing the two across your catalog is a classic cause of wrong totals.
Rates
Tax → Standard rates → Insert row: country, rate (%), name. If some products have a reduced rate, create a separate class (Reduced rate) and assign it to them.
Display
Tax → Display prices in the shop / during cart and checkout → choose Including tax for consumers. Plus Display tax totals as a separate line — buyers want to see the VAT on the invoice.
If you are NOT VAT registered
Do not enable taxes at all — prices are final. But make sure the invoice matches your status. When you do register, the settings take 10 minutes to change.
Test before launch
Place an order and compare: product price, cart total, invoice amount. All three must match to the cent.
With us, VAT and invoicing are set up together with the store — accounting reports included.