---
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title: Understanding VAT Implications
collection: admin
version: current
locale: en-us
portal_url: https://docs.salesforce.com/admin/current/en-us/cc/264-0-0/b2c_understanding_vat_implications.md
canonical_url: https://help.salesforce.com/s/articleView?id=cc.b2c_understanding_vat_implications.htm&release=264.0.0&type=5
source_site: help.salesforce.com
content_type: documentation
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description: In B2C Commerce, the value added tax (VAT) is a form of indirect sales tax paid on products and services at each stage of production or distribution, based on the value added at that stage and included in the cost to the ultimate customer. At each stage, the tax is assessed as a percentage on the amount by which goods increase in value from the raw materials or semi-manufactured stage.
products:
  - Commerce
  - B2C Commerce
release: "264"
---
# Understanding VAT Implications

In B2C Commerce, the value added tax (VAT) is a form of indirect sales tax paid on products and services at each stage of production or distribution, based on the value added at that stage and included in the cost to the ultimate customer. At each stage, the tax is assessed as a percentage on the amount by which goods increase in value from the raw materials or semi-manufactured stage.

VAT is imposed throughout the European Community and European Free Trade Association (EFTA) countries and many other trading nations, but not the USA.

When customizing your storefront to handle VAT, consider these best practices:

- Sites using VAT don't typically want to display tax amounts on the storefront because product prices include the VAT.
- To suppress the display of the tax amount on the storefront and make sure that customers aren’t charged twice for taxes, set the site's Taxation Policy to _Gross._ If you switch Taxation Policy to _Gross,_ the product prices should also be provided as _Gross_ (including tax).
    
    To display prices in the cart and the checkout templates, make sure you’re using _Gross_ prices and not _Net_ prices.
- If you’re using VAT and the taxation policy is set to _Gross,_ even if you don't want to show your customers any tax info, set a Tax Rate on all the VAT Tax Classes so that the backend collects the tax information.

![Important](https://sf-zdocs-cdn-prod.zoominsoftware.com/tdta-cc-b2c_merchandiser_administrator-264-0-0-production-enus/ea76f372-6cfa-42a6-8e7c-05c6df7abed8/images/icon_important.png)

Important

See Taxation Impact On Subscription Fees to understand how tax calculations can significantly impact the subscription fees that you pay.

## Storefront Customization

No storefront customization is necessary when dealing with VAT. Business Manager handles all taxes; no custom code is needed.

Click App Launcher ![App Launcher](https://sf-zdocs-cdn-prod.zoominsoftware.com/tdta-cc-b2c_merchandiser_administrator-264-0-0-production-enus/ea76f372-6cfa-42a6-8e7c-05c6df7abed8/cc/b2c_merchandiser_administrator/images/appLauncher.png), and then select **Ordering** | **Taxation** | **Tax Rates**. Enter tax percentages as decimal (for example, 17.5% is 0.175). You can also enter 17.5% directly and it will automatically convert to 0.175. Assign each product to an individual tax class, which is how tax classes relate to the rates (within the tax classes jurisdictions also come into play).

See Managing Site Taxes.