Magento | Adobe Commerce VAT Configuration

A few posts ago, I shared with you the Step by Step Guide: Tax Configuration in Magento | Adobe Commerce. However, I didn’t pay a lot of attention to European taxes. Today we’re going to make it right and deal with the VAT configuration in Magento | Adobe Commerce.  

VAT Configuration 

As an example, we’ll set up Value-Added Tax for France. 

Step 1. New Create Tax Rate 

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1.Admin Sidebar > Stores > Tax Zone and Rate > Add New Tax Rate 

2.Create two Tax Rates: 

a. Tax Identifier: France-Standard VAT
    Country: France
    State/Region: *
    ZIP/Postal Code: *
    Rate: 20

b.Tax Identifier: France-Reduced VAT
  Country: France
  State/Region: *
  ZIP/Postal Code: *
  Rate: 5

Step 2. Create New Tax Rule 

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1.Admin Sidebar > Stores > Tax Rules > Add New Tax Rule

2.Create the following Tax Rules: 

a. Retail-France-StandardVAT 

 Settings: 

Customer Class: Retail Customer

Tax Class: VAT-Standard (add new product tax class by clicking Add New Tax Class)

Tax Rate: France-StandardVAT

Priority: 0

Sort Order: 0

b. Retail-France-ReducedVAT

Settings: 

Customer Class: Retail Customer

Tax Class: VAT Reduced

Tax Rate: France-ReducedVAT (add new product tax class by clicking Add New Tax Class)

Priority: 0

Sort Order: 0

Step 3. Configure Tax Settings for France

 

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1.Admin Sidebar > Stores > Configuration > Sales > Tax

2.Complete general settings the next way:

 

FIELD	RECOMMENDED SETTING
Tax Classes	Default
Calculation Settings
Tax Calculation Method Based On	Total
Tax Calculation Based On	Shipping Address
Catalog Prices	Including Tax
Shipping Prices	Including Tax
Apply Customer Tax	After Discount
Apply Discount on Prices	Including Tax
Apply Tax On	Custom Price (if available)
Default Tax Destination Calculation
Default Country	France
Default State
Default Postal Code	* (asterisk)
Shopping Cart Display Settings
Include Tax in Grand Total	Yes
Fixed Product taxes
Enable FPT	Yes
All FPT Display Settings	Including FPT and FPT description
Apply Discounts to FPT	No
Apply Tax to FPT	Yes
Include FPT in Subtotal	Yes

Step 4. Apply Tax Classes to Products 

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1. Catalog > Products.
   
2. Open a product from your catalog in edit mode.
   
3. On the General page, find the Tax Class field. Then, select the VAT Class that applies to the product.
   
4. When complete, click the Save button.

 

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