If you would like your store to charge tax or value added tax (VAT) then you can also add taxes to your store which will automatically add the tax rate to the pricing of your products.

Here is how to set it up.

Firstly, you need to go to the left sidebar menu dashboard and hover your mouse over Woocommerce. A panel will open where you then have to click on settings.

Once the page is finished loading, you can then click on the tab labeled “Tax”. We are first going to go over the global tax options.

1. Tax Options

You can choose whether you want your prices to be inclusive or exclusive of tax. You can also choose which address should be used to calculate the tax rate.

For shipping tax class, you can choose “Shipping tax class based on cart items”. You can choose this for any tax class that you want.

Leave rounding unchecked.

Under additional tax classes, you can add additional classes to your store. We have already added a Reduced rate and Zero rate. If the shipping area has more than one tax rate, then you would add additional tax classes for each area that has a different rate.

So if you have an area that only has one fixed tax rate, then you will only need one tax class. In most cases, you would use the “Standard rates” as the default tax class.

You can also separately choose to include or exclude the rate on the shop, cart, and checkout pages.

The price suffix is the text that shows after your product prices when tax is included in the price. In most cases, we will only put VAT there.

Under tax total, we will make it itemized.

2. Customize Your Tax Class

For this scenario, we are going to only customize the “Standard rates” tax class. First, you need to select the “Standard rates” class which is located next to “Tax options”.

You will notice that there is a row for you to edit the data. You will start with the country code and move through all the columns. In most cases, you will leave the State code, Postcode / ZIP, and City open if you have a flat tax rate throughout your country.

Next, change the value of the rate to reflect the tax rate of the country you wish to sell in and set the tax name and priority to 1.

You can choose to compound the tax. In this case, we leave this option unchecked. You can also apply the tax rate to the shipping cost.

You can add an additional row if you cover cities with different tax rates that need to be included. You can also customize the Reduced rate and Zero rate classes if you want to.

3. How Your Tax is Displayed

Your tax rate will be displayed on the cart and checkout page. Let’s go to the cart page and see what it is going to look like. You will notice that the tax rate is added to the subtotal to give you your total.

When you go to the checkout page you will also notice that it shows you the Subtotal, VAT, and Total.