In this chapter you can select that determine whether tax is included in the product prices.
Prices Exclude Taxes
The excluded tax amount will be all time the same, 100€ for instance. And the taxes will be calculated before the payments during the checkout and added to the excluded tax price depending on your customer evidence (Business or Consumer, Billing Country, IP address, Credit card country), your tax threshold and the nature of the item sold.
If sales tax/VAT/GST is due, calculate it and add it on top of the 100€.
Let’s say you sell to a Italian customer, VAT is 22%. It will calculate: 100€ * 1,22 = 122€, this amount is the price (the all tax inclusive amount) which you will sell your service/product.
Prices Include Taxes
Tax Included means that you sell a service/product at the same price for all customers at all times in all countries.
For example, if you sell an item for 100€ in one country, it will be sell for the same price in all countries. And the tax will be calculated after the payment depending on your customer evidence (Business or Consumer, Billing Country, IP address, Credit card country), your tax threshold and the nature of the item sold.
If sales tax/VAT/GST is due, will deduct the tax amount from the 100€ you sold.
Let’s say you sold to a German customer, VAT is 19%. It will calculate: 100€ / 1,19 = 84,03€, this amount is the extratax amount. So, the tax amount represents: 100€ - 84,03 = 15,97€.