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How to set up general tax configuration on your Magento store

  1. Navigate to System - Configuration
  2. From the left hand menu choose Sales - Tax
  3. Set up: Tax Classe, Calculation Settings, Default Tax Calculation Settings, Price Display Settings, Shopping Cart Display Settings, Orders, Invoices, Credit Memos Display Settings
  4. Click Save Config orange button

You probably noticed that, even though we adjusted tax classes, customer, and product tax classes, added tax rules and properly filled out zones to which we will be happy to send our products too, they are still not showing on our storefront.

Before you go into panic mode, you need to do one more thing – set up everything regarding general configuration. So, let’s wrap up our tax related series and set up everything according to our needs.

Let’s take a look for a moment. We added VAT 20% tax to our amazing couch we are selling on our Support Pandas store.

In our store’s admin, it looks like this:

Product with taxes added

And this is how it looks like on our storefront, once the customer is ready to checkout:


Even though our product has a tax class VAT 20%, and we chose Germany as our shipping address, it seems that what we have previously created doesn’t show, and our tax doesn’t add up.

This is where general configuration comes into play, and we will show you below how to set up everything easily, so get comfy, grab a hot beverage, and read on.

All necessary settings can be found if you navigate to System and choose Configuration.

Magento System Configuration

Once there, take a look at the right-hand side menu and choose Sales. All your tax related settings will be under Tax.

At this point, this is what you will see – all those different tabs that will help you out set up your product taxes impeccably!

First, choose Tax and decide whether you will have shipping tax as well or not. Simply choose desired option from the dropdown menu.

We chose that our shipping would also be subject to taxes.

Shipping tax

Move on to Calculation Settings

Tax calculation settings

Next, set up Default Tax Destination Calculation. Note that once more we used the asterisk in order to include all states and post codes.

Tax destination calculation

Move on to setting up Price Display Settings and decide whether you wish to show prices in the catalog to include tax or not. Also, set up the way your shipping prices will appear.

Take a look:Price display settings in Magento

Next, choose how your prices will display across your store – in your shopping cart, order, invoice, credit memo and shipping confirmation.

price display settings

We wanted our taxes to show in order summary, and here is how our checkout appears now:

Show tax in checkout

You’re all set!

If at any point you need to start/stop showing taxes, simply find the corresponding dropdown, exclude or include them and don’t forget to save your configuration. Good luck!