Our plugins don't affect tax calculation, which is handled entirely by WooCommerce. Below you can find an explanation of how taxes are calculated in WooCommerce.
Product prices inclusive of tax
If you set product prices inclusive of tax, then WooCommerce will treat all products prices as inclusive of tax, and it will be the tax that applies to your base country. For example, if your country is UK (20% tax), then the prices will be treated as follows (using imaginary figures, in multiple currencies, supported by our Currency Switcher):
100 EUR = 100 EUR inclusive of 20% UK tax
100 GBP = 100 GBP inclusive of 20% UK tax
100 USD = 100 USD inclusive of 20% UK tax
Now, let's suppose that you charge the tax at the rate applicable to customer country, if the customer is in the EU, and you don't charge any tax for extra-EU customer. When a customer buys from you, the tax will be recalculated as follows:
- Germany, 19% tax = 100 EUR - 20% tax + 19% tax = 99.17 EUR
- Ireland, 20% tax = 100 EUR - 20% tax + 23% tax = 102.50 EUR
- United States (0% tax) = 100 USD - 20% tax = 83.33 USD
- United Kingdom (20% tax) = 100 GBP - 20% tax + 20% tax = 100 GBP
The above is by design in WooCommerce, our plugins have no role in this calculation.
How to keep product prices fixed, regardless of the applicable tax
In some cases, it might be desirable to have product prices that don't change with the tax. Following the example above, a product price could be 100 EUR inclusive of whatever tax (19%, 20%, 23%, 0%). This can be achieved by installing our Tax Display by Country plugin, which includes an option for that specific purpose (see related knowledge base article).
Product prices exclusive of tax
If you enter prices exclusive of tax, then the appropriate tax will be added on top of the product price:
- Germany = 100 EUR + 19% tax
- Ireland = 100 EUR + 23% tax
- United Kingdom = 100 GBP + 20% tax
- United States = 100 USD + 0% tax
In WooCommerce, shipping is always considered exclusive of tax, regardless of any other setting. This is a hard-coded logic in WooCommerce, which cannot be circumvented.
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