Magento Tax (Vat) rate issue for different countries

Question

I am having an issue with Tax rates for different countries.

I need 3 types tax rates for different countries

Ireland & Europe 23% UK 20% Outside Europe 0%

For testing i have set up a Tax Rate (Manage Tax Rates & Zones) for the UK with a 20% rate. The Irish rate of 23% had previously been used for the past 2 years for all sales.

UK Tax Rate Setup

Tax Identifier - UK

Country - UK

State - *

Zip/Post Code - *

Rate Percent - 20.0000

Tax Titles - UK VAT

I have also gone to tax in the config section and set the tax to be calculated on shipping address.

Shipping -> Configuration -> Tax -> Tax Calculation based on -> Shipping Address

When i go to my site at FunkyChristmasJumpers.com and go to the checkout, its default country is Ireland and Tax is at 23%, i then change country in the address to the UK and onestepcheckout refreshes with no tax included? [pictures below]

Any help would be greatly appreciated.

Thanks Fabio

Note:

1. We have 3 stores set up

   • Ireland, Europe - www.funkychristmasjumpers.com
   • UK - www.funkychristmasjumpers.co.uk

   • Worldwide - www.funkychristmassweaters.com

   • I just want this working on the Irish store and i feel it will automatically fall in place for the other stores.

2. We run magento 1.7 but magento 1.9 has a setting called Cross-Border Price consistency which help keep the gross price consistent through all stores. I do not want to upgrade so i think an option for us is this Gross price extension

   • http://www.magentocommerce.com/magento-connect/fixed-gross-price.html

3. Shipping prices are different for UK and Ireland on the Irish site

4. We run magneto ce 1.7

Answer 1

If your tax calculation is based on the shipping address, you need to setup your VAT rate of 23% for every country in the EU and then use these VAT rates in your tax rule.

If Magento can not find a tax rate for the shipping country, then no VAT will be applied.