Please note this isn't a tax rounding issue - it's functionality not working as intended.

I've just installed 1.8 to start developing a new site and am setting it up for use in Australia. Here, GST (tax) must be visible and included in the advertised price throughout the entire process, but a subtotal is needed showing tax amount (10%).

I also input the price of the goods as including tax. E.g: A product has it's price field entered at $100. This is $100 including Tax. Therefore the catalog / checkout prices must be $100, and the tax calculation breakdown must be

Subtotal $90.91 Tax $9.09 Total = $100

(Note: subtotal isn't required, only tax and total).

My tax settings are as follows.

Tax Classes

Tax Class for Shipping : Shipping

Calculation Settings

Tax Calculation Method Based On : Unit Price

Tax Calculation Based On : Shipping Address

Catalog Prices : Including Tax

Shipping Prices : Including Tax

Apply Customer Tax : Before Discount

Apply Discount On Prices : Including Tax

Apply Tax On : Custom Price If Available

Default Tax Destination Calculation

Default Country : Australia

Default State : *

Default Post Code : *

Price Display Settings

Display Product Prices In Catalog : Including Tax

Display Shipping Prices : Including Tax

Shopping Cart Display Settings

Display Prices : Including Tax

Display Subtotal : Including Tax

Display Shipping Amount : Including Tax

Include Tax In Grand Total : Yes

Display Full Tax Summary : No

Display Zero Tax Subtotal : No

No matter what arrangement I have them, it will either display the prices as if they have been entered not including tax. i.e. the example prices will display as $110 in catalog and cart. Or they will display correctly, but then tax will be added onto that total and it will still come out at $110.

It's like magento is not recognising the setting Catalog Prices : Including Tax which is defined as "Whether catalog prices entered by admin include tax."

Am I doing something wrong or is this a bug?