I need to set up VAT (tax) rates in Magento 2 and I don't know where to start as tax options are all over the place.

Catalogue prices are shown inc. VAT at 20%. This needs to be charged to customers in the UK and the EU, but not to the rest of the world, including the Channel Islands of the UK (Jersey and Guernsey).

Shipping rates to the UK and the EU are shown inc. VAT, but as there's no VAT on international postal services, postage rates to ROW are shown and calculated ex-VAT.

Where do I start? How do I do it?
  1. Create a rule for tax: Store → Taxes (Tax Zones and Rates)

  2. Select your country and tax rate

  3. Create tax rule: Store → Taxes (Tax Rules)

If you need more customization create your own Customer Tax Class or Product Tax Class. You can even set a zone to apply tax rates on it.

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You can set tax country wise in Magento 2. In default magento you can set tax from admin by navigate to Store -> Tax Rules, Store -> Tax Zones and Rates. If you want to know more you can check the following link:


Which explains the tax setup.

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