A Complete Guidelines In EU Tax Configuration For Magento 2 Store

In this article, we will describe a guideline in EU Tax configuration for Magento 2 store based in France that sells >100k Euros in France and > 100k Euros in Germany.

• Tax calculations are managed at the website level.
• Currency conversion and tax display options are controlled individually at the store view level (Click the Use Website checkbox to override the default).
• You can dynamically show the correct tax for the jurisdiction by setting the default tax country.
• Fixed product tax is included for material goods as a product attribute.
• To ensure that it shows up in the correct category/website/store view, it might be necessary to edit the catalog.

Step 1: Create Three Product Tax Classes

In this example, the multiple VAT-Reduced product tax classes are unecessary.

1. Create a VAT-Standard product tax class.
2. Create a VAT-Reduced product tax class.
3. Create a VAT-Free product tax class.

Step 2: Create Tax Rates for France and Germany

Create the following tax rates:

Tax Rates

TAX RATE	SETTING
France-Standard VAT	Country: France State/Region: * ZIP/Postal Code: * Rate: 20%
France-Reduced VAT	Country: France State/Region: * ZIP/Postal Code: * Rate: 5%
Germany-Standard VAT	Country: Germany State/Region: * ZIP/Postal Code: * Rate: 19%
Germany-Reduced VAT	Country: Germany State/Region: * ZIP/Postal Code: * Rate: 7%

Step 3: Set Up the Tax Rules

Create the following tax rules:

Tax Rules

TAX RULE	SETTING
Retail-France-Standard VAT	Customer Class: Retail Customer Tax Class: VAT-Standard Tax Rate: France-Standard VAT Priority: 0 Sort Order: 0
Retail-France-Reduced VAT	Customer Class: Retail Customer Tax Class: VAT Reduced Tax Rate: France-Reduced VAT Priority: 0 Sort Order: 0
Retail-Germany-Standard VAT	Customer Class: Retail Customer Tax Class: VAT-Standard Tax Rate: Germany-Standard VAT Priority: 0 Sort Order: 0
Retail-Germany-Reduced VAT	Customer Class: Retail Customer Tax Class: VAT-Reduced Tax Rate: Germany-Reduced VAT Priority: 0 Sort Order: 0

Step 4: Set Up a Store View for Germany

On the admin sidebar click Stores > All Stores

Create a store view for Germany. Follow these steps:

• Stores > Configuration. Set Default Config to the French store.
• On General Page, open the Countries Options tab and set the default country to “France.”
• Complete the locale options as needed.

In the upper-left corner, choose the German Store View and follow these steps:

• On the General page, open Countries Options, and set the default country to “Germany.”
• Complete the locale options as needed.

Step 5: Configure Tax Settings for France

Complete the following General tax settings:

General Settings

FIELD	RECOMMENDED SETTING
TAX CLASSES
Tax Class for Shipping	Shipping (shipping is taxed)
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 6: Configure Tax Settings for Germany

Click Stores > Configuration. In the upper-right corner, set Store View to the view to the German store and click OK. On the left of the panel under Sales, click Tax.

In the Default Tax Destination Calculation tab, follow these steps:

• Default Country
• Default State
• Default Post Code

This setting ensures that tax is calculated correctly when product prices include tax.

Click Save Config.