Should WooCommerce prices include VAT?

For B2C stores, prices including VAT are usually clearer. For B2B stores, prices excluding VAT can be more practical if invoices and customer status are controlled.

Can WooCommerce apply several VAT rates?

Yes. Create additional tax classes for reduced-rate products, then assign the right class to each product.

How do I handle EU B2B customers?

Ask for the VAT number, validate it through VIES and keep proof of validation before applying reverse charge.

Which VAT rate applies to EU B2C sales?

Once the OSS threshold is exceeded, the customer country rate applies. Check the current rates in the EU VAT rates table.

Are exports outside the EU taxable?

Exports are usually invoiced without domestic VAT, but DDP sales can trigger local VAT and customs obligations in the destination country.

Set Up VAT in WooCommerce: EU Guide

Why configure VAT in WooCommerce?

Configuring VAT correctly in your WooCommerce store is not a technicality you can defer. It is a mandatory step in running a compliant online business. Here is why it matters:

Legal obligations

Regardless of where you sell, every country enforces its own VAT rules. In France, non-compliance can trigger penalties and in-depth tax audits by the DGFiP (impots.gouv.fr). Applying incorrect rates exposes your business to tax reassessments.

Calculation errors

An incorrect configuration leads to billing errors, either undercharging or overcharging VAT. If the price changes unexpectedly at checkout because of a misconfiguration, it creates confusion, erodes trust, and costs you sales.

Customer experience

Nobody likes surprises at payment. Displaying correct prices, with VAT included or excluded from the start, signals that your store is reliable and professional. A transparent checkout builds confidence and keeps customers coming back.

Accounting

When VAT is properly configured, every figure your accountant needs is already present on your invoices. No more hours spent manually recalculating VAT on each transaction. You save time and money across the board.

International sales

If you sell internationally, VAT rules and rates vary from country to country. Knowing when to apply French VAT, when to use the EU reverse charge mechanism, or when not to charge VAT at all is essential. The more precise your settings, the smoother your cross-border sales will be.

VAT rates for WooCommerce sales in France

For sales in France, the standard VAT rate to configure in WooCommerce is %. Reduced rates apply for specific product categories:

%: home improvement work, restaurants, passenger transport, museum tickets
%: staple foods, books, online press subscriptions, energy renovation
%: reimbursed medicines, printed press and a few highly specific categories

Before configuring products in WooCommerce, identify the correct rate for each product or service. Check the DGFiP (impots.gouv.fr) website for the official list.

VAT on EU distance sales (OSS)

For B2C distance sales across the EU, the rules shift once you exceed the €10,000 annual threshold across all EU countries combined. Below that threshold, you can apply French VAT to all EU sales. Once you cross it, you must charge the VAT rate of the customer's country.

The OSS (One-Stop-Shop) portal at impots.gouv.fr lets you file a single quarterly return covering all your EU distance sales, rather than registering for VAT in each individual member state. This significantly reduces the administrative burden for French-based sellers.

For B2B sales to EU businesses: if the customer provides a valid EU VAT number, you invoice without VAT under the reverse charge mechanism. The customer declares and pays VAT in their own country. Always verify the VAT number via the VIES database before issuing a zero-rated invoice.

VAT on exports outside the EU

Selling to customers outside the European Union gives you a choice between two Incoterms that determine who handles VAT and customs duties: DAP (Delivered At Place) or DDP (Delivered Duty Paid).

Selling on DAP terms

With DAP, you invoice the product price without VAT:

No VAT to charge: as the seller, you have no VAT obligation on the sale itself, which keeps your administration straightforward.
Import duties and VAT fall on the customer: the buyer settles customs charges and import VAT on delivery, depending on the destination country, the product type, and the order value.
Risk to customer experience: your customer has already paid on your site and then faces unexpected charges to collect their parcel. If this was not clearly communicated upfront, it generates frustration and disputes.

Selling on DDP terms

DDP means you absorb all import-related costs and deliver a fully landed price to your customer. It requires more from your side:

VAT registration in the customer's country: you must obtain a local VAT number and comply with local filing rules.
Fiscal representative: in many non-EU countries you will need to appoint a fiscal representative to handle registration, returns, and local compliance on your behalf.
Customs handling: your chosen carrier (DHL, FedEx, UPS) must be capable of managing destination customs clearance, which adds cost to each shipment.
Better customer experience: the customer receives their parcel with nothing additional to pay. Everything is included in the price shown on your site, which markedly improves the buying experience.

How to configure VAT in WooCommerce

Now that you know which VAT rates apply, here is how to set them up in WooCommerce. The platform handles this through a straightforward sequence of steps.

Enable tax management

Before anything else, make sure tax management is switched on in your store:

Go to your WooCommerce dashboard and click WooCommerce > Settings.
In the General tab, check the option Enable taxes and tax calculations. This activates the Tax tab in your settings.
Click Save changes at the bottom of the page.

Configure general tax options

Go to the Tax tab to access the main tax settings:

Tax calculation: choose whether prices include or exclude VAT. For a B2C store, select Tax inclusive so customers see the VAT-included price immediately.
Based on: select the method used for calculation (billing address, shipping address, or shop base address).
Additional tax classes: if you sell products at different rates (books at % alongside standard goods at %), add those classes here so you can assign the correct rate when creating products.

Add VAT rates

For each tax class (standard, reduced, or custom), enter the applicable rates:

Click the name of the tax class you want to configure, for example Standard rates.
Fill in the required fields: Country code (e.g. FR), Post code (leave blank for the whole country), Rate % (e.g. 20.0000), Tax name (e.g. VAT France 20%), Priority, and whether to Apply to shipping.
Click Insert row to add the rate. Repeat for each additional rate.

Import rates via CSV

If you sell across multiple countries with different rates, use the import/export feature:

Import rates: create a CSV file with the following columns: country code, state code, post code, city, rate %, tax name, priority, compound, shipping, tax class. Then click Import CSV in your tax class tab.
Export rates: use the Export CSV button to back up or share your VAT rate configuration.

Test your configuration

Once the rates are in place, place a test order to confirm everything works as expected. Check that prices include VAT correctly and that the right rates are applied according to the rules you have defined.

Plugins to simplify VAT management in WooCommerce

Configuring VAT rates manually in WooCommerce is time-consuming, especially for cross-border sales. Several well-built plugins take care of the heavy lifting.

WooCommerce EU VAT Assistant

WooCommerce EU VAT Assistant is designed specifically for managing VAT obligations within the European Union. It is particularly useful for B2B sales, allowing you to verify and record EU VAT numbers directly at checkout:

Automatic VAT number verification: connects to the VIES database to validate European VAT numbers in real time.
Compliant invoicing: generates invoices that meet EU regulations, including VAT number references and exempt amounts.
Detailed reports: produces clear reports for VAT calculation and filing, simplifying your accounting.

Taxamo

Taxamo is a powerful solution for sellers managing VAT across multiple jurisdictions. It is especially well suited to vendors of digital services (e-books, software, online courses):

Automatic VAT calculation: applies the correct rate based on the customer's location, whether in Europe, Canada, or elsewhere.
Simplified registration and filing: generates the reports you need for VAT returns and manages registration across different countries.
Direct WooCommerce integration: automates the entire VAT collection process, saving significant administrative time.

WooCommerce EU VAT Compliance

This plugin is an essential tool for handling EU VAT on B2C sales with minimal effort:

Automatic VAT calculation: adjusts rates automatically based on the customer's country of residence, ideal for B2C transactions.
Clear price display: shows prices inclusive or exclusive of VAT depending on where the customer is located, avoiding any confusion at checkout.
Evidence storage: for digital sales, automatically stores location evidence (IP address, billing address) to demonstrate the origin of each sale in the event of a tax audit.

EU VAT for WooCommerce

EU VAT for WooCommerce is a straightforward but effective plugin for stores selling across the European Union:

Automatic country detection: identifies the customer's country and applies the corresponding VAT rate automatically.
VAT exemption for businesses: companies with a valid EU VAT number can purchase without VAT applied.
Multi-currency support: handles different currencies, which is practical for multi-country sales.

How to Set Up VAT in WooCommerce