---
title: "EU VAT Configuration"
description: "This guide explains how to configure Value Added Tax (VAT) for stores based in the European Union."
url: "https://docs.j2commerce.com/v6/taxation/eu-vat"
markdown_url: "https://docs.j2commerce.com/v6/taxation/eu-vat.md"
last_updated: "2026-10-23T02:33:38+00:00"
version: "J2Commerce 6"
breadcrumbs:
  - title: "Home"
    url: "https://docs.j2commerce.com/"
  - title: "J2Commerce 6"
    url: "https://docs.j2commerce.com/v6"
  - title: "Taxation"
    url: "https://docs.j2commerce.com/v6/taxation"
  - title: "EU VAT Configuration"
    url: "https://docs.j2commerce.com/v6/taxation/eu-vat"
---

# EU VAT Configuration

This guide explains how to configure Value Added Tax (VAT) for stores based in the European Union. The example uses Germany with a 19% VAT rate, but you can adapt it to any EU country.

## Important Legal Notice

> **Warning:** The information and examples provided are for general informational purposes only and do not constitute tax or legal advice. J2Commerce and its employees or affiliates make no representations or warranties regarding accuracy or applicability and accept no liability for VAT or tax compliance. Tax regulations, including but not limited to, US, CANADIAN tax or EU VAT rules for digital and physical goods, are complex and subject to change. Users are solely responsible for ensuring compliance and should consult a qualified tax advisor.

## Understanding EU VAT Pricing

EU stores typically display prices **including VAT**. When you enter a product price of €100, customers see €100 (with the VAT already calculated into that price).

## Recommended Step-by-Step Setup

### Step 1: Create a Geozone for Base Rates

- Go to **J2Commerce** **-> Localization -> Geozones**.

![Joomla admin navigation to Geozones: Components, J2Commerce, Dashboard, then the J2Commerce menu button with Localization and Geozones highlighted, above the Geo Zones list](https://docs.j2commerce.com/images/docs/shared/canada-geozone.webp)

- Click **New**.
- Enter the following:
  - **Geozone Name:** `Base rates`
  - **Country:** `Germany`
  - **Zones:** `All`
- Click **Save**.

### Step 2: Create a Tax Rate

- Go to **J2Commerce** -> **Localization** -> **Tax Rates**.

![Joomla admin navigation to Tax Rates: Components, then the J2Commerce menu button with Localization and Tax Rates highlighted, above the Tax Rates list](https://docs.j2commerce.com/images/docs/shared/canada-tax-rate.webp)

- Click **New**.
- Enter the following:
  - **Name:** `VAT`
  - **Tax Percent:** `19`
  - **Geozone:** `Base rates`
  - **Status:** `Published`
- Click **Save**.

### Step 3: Create a Tax Profile and Rules

- Go to **J2Commerce** -> **Localization** -> **Tax Profiles**.

![Joomla admin navigation to Tax Profiles: Components, J2Commerce, then the J2Commerce menu button with Localization and Tax Profiles highlighted, above the Tax Profiles list](https://docs.j2commerce.com/images/docs/shared/canada-tax-profile.webp)

- Click **New**.
- Enter the following:
  - **Tax Profile Name:** `Base Tax Profile`
  - **Status:** `Published`
- In the **Tax Rate** section, click **Add**, select the **VAT** rate, and set the **Address Type** to **Shipping**.
- Click **Save**.

### Step 4: Configure General Tax Settings

Because EU prices are generally displayed inclusive of tax, use these settings:

- Go to **J2Commerce -> Setup -> Configuration**.

![J2Commerce Configuration opened from the Setup menu, with the Product Settings tab highlighted among Store, Product Display, Cart, Checkout, Orders and Emails tabs](https://docs.j2commerce.com/images/docs/shared/eu-digital-config2.webp)

- Navigate to the **Product Settings** tab.
- Set the following values:

| Setting | Value | Description |
| --- | --- | --- |
| **Prices Entered with Tax** | `Yes` | Prices in the backend include VAT. |
| **Calculate tax based on** | `Shipping address` | VAT is based on where the item is sent. |
| **Default Customer address** | `Store address` | Default to your home country. |
| **Display prices on product pages** | `Including tax` | Customers see the final price. |
| **Display prices in cart / checkout** | `Including tax` | Show inclusive prices. |
| **Apply discounts** | `After tax` | Discounts are applied to the gross price. |

### Step 5: Assign Tax Profile to Products

1. Open the **Article Manager** and edit your **product**.
2. Go to the **J2Commerce** tab **->** **General** tab.
3. Select **Base Tax Profile** from the **Tax Profile** dropdown.
4. Click **Save**.

![Article edit screen, J2Commerce tab and General subtab highlighted, with the Tax Profile field highlighted and set to Digital Goods Tax Profile](https://docs.j2commerce.com/images/docs/shared/eu-digital-product.webp)

## Selling to Multiple EU Countries

If you sell across Europe, you have two options for managing different VAT rates:

### Option A: Same VAT Rate

If other countries use the same rate (e.g., 19%), simply edit your **Base rates** Geozone and add those additional countries to the list.

### Option B: Different VAT Rates

1. Create a new **Geozone** for the specific countries (e.g., "France & Italy").
2. Create a new **Tax Rate** with the correct percentage (e.g., 20%).
3. Open your **Base Tax Profile** and add a new rule mapping this new tax rate to the **Shipping address**.

## Digital Goods Note

For digital products, EU law requires charging VAT based on the **buyer's location (Billing Address)**. For this, we recommend using the **EU VAT Plugin**, which automates VAT number validation and handles B2B (0% VAT) vs. B2C transactions.