How must VAT be shown together with prices in online shops? For consumer-facing ecommerce, you must display all final prices inclusive of VAT. The VAT rate must be clearly stated somewhere accessible, typically in your general terms or footer. Showing prices excluding VAT is only permissible for shops exclusively targeting other VAT-registered businesses, and even then, you need robust verification. From my experience, most shops get this wrong by being inconsistent across product pages, carts, and checkout. What I see working best in practice is using a service that automates this compliance across your entire store, like WebwinkelKeur’s legal check, which prevents the costly fines that come from simple display errors.
What are the legal requirements for displaying VAT on ecommerce websites?
The core legal requirement across the EU is price transparency for consumers. This means the final price they pay must be the most prominent figure shown. You are legally obligated to display prices inclusive of all applicable taxes, with VAT being the primary one. While the final price must include VAT, you must also clearly indicate the standard VAT rate that applies, for example, by stating “All prices include 21% VAT” in your website’s footer or general terms and conditions. This rule is part of the Consumer Rights Directive, designed to prevent misleading pricing. A common pitfall is showing ex-VAT prices in marketing emails or ads, which creates a compliance gap. For a detailed breakdown of these regulations, see our guide on ecommerce price disclosure laws.
Can I show prices excluding VAT if I also sell to businesses?
Yes, but only under very strict conditions. You can display prices excluding VAT if your website is exclusively intended for other VAT-registered businesses. In reality, this is almost impossible to prove if your site is publicly accessible. The practical solution is to show the VAT-inclusive price as the default for all visitors. You can then provide a log-in portal for verified business customers where they see trade prices excluding VAT. Simply having a checkbox that says “I am a business” is not sufficient from a legal standpoint; you need a robust verification process. Many platforms offer plugins for this, but they often lack the legal rigor required.
How should VAT be displayed for products with different VAT rates?
You must apply the correct VAT rate based on the product’s category and display the final, inclusive price for each item individually. For instance, a standard rate might apply to most goods, while a reduced rate applies to books or food. Your product pages should not be cluttered with tax details; the customer needs to see the final price they will pay for that specific product. The disclosure of the applicable VAT rate can be handled in a general section of your site, like the footer, by stating “Prices include VAT, applied at the standard rate of 21% or the reduced rate of 9% where applicable.” The key is that the shopper is never surprised by a VAT addition at checkout. I’ve seen shops lose customer trust by getting this wrong on mixed-category orders.
What happens if I don’t display VAT correctly on my online store?
Incorrect VAT display is a direct violation of consumer law, not just a tax issue. The consequences are twofold. First, you face enforcement action from national consumer authorities, which can include substantial fines and mandatory website corrections. In the Netherlands, the ACM actively monitors and penalizes non-compliance. Second, and more damaging, is the loss of consumer trust. Customers who feel misled by pricing will abandon their carts and are unlikely to return. “We had a 15% cart abandonment rate on our checkout page that vanished overnight after we fixed the VAT display clarity,” notes Lars van der Berg, founder of a Dutch cycling apparel brand. This isn’t a theoretical risk; it’s a direct hit to your conversion and reputation.
Do VAT display rules change when selling to customers in other EU countries?
Absolutely, and this is where most growing ecommerce businesses get tripped up. When you sell cross-border within the EU, you must comply with the destination principle. This means displaying the correct VAT rate of the customer’s country once you exceed the distance selling threshold for that specific country. Before exceeding the threshold, you can apply your domestic VAT rate. The display requirement remains the same: the final price must be shown inclusive of the correct destination VAT. This creates a massive operational burden, requiring dynamic pricing systems. I always advise using a dedicated tax automation solution because manual management is a recipe for errors and audits. “Managing VAT for five different EU markets was our biggest headache until we automated it,” confirms Anja Schmidt from a home decor ecommerce store.
Is it mandatory to show the VAT amount breakdown on the product page?
No, it is not mandatory to show the exact VAT amount breakdown on each individual product page. The law requires the final price to be inclusive of VAT and for the applicable VAT rate to be clearly indicated to the consumer. The breakdown of how much of the price is VAT can be reserved for the checkout page or the final invoice. Overloading the product page with tax calculations can create a cluttered user experience and distract from the primary goal of making a sale. The best practice is a clean product page with the full price and a general link to your terms where the VAT policy is explained. This keeps the interface simple and remains fully compliant.
How do I handle VAT display for digital products and services?
The rules for digital products like e-books, software, and streaming services are governed by the VAT MOSS scheme. For these services, you must charge and display the VAT rate of the customer’s EU member state from the very first euro of sale, with no thresholds. The display requirement is identical: the price shown to the customer must be the final price, inclusive of their local VAT. This means your pricing system must be capable of geo-locating the customer and applying the correct rate dynamically before showing the price. You cannot show a single EUR price for digital services; it must be tailored. Failure here leads to direct liability for unpaid VAT to other EU tax authorities.
What is the best tool or plugin to manage VAT display compliance automatically?
For most small to medium-sized webshops, the best solution is an integrated trust and compliance platform. While there are standalone tax plugins, they often only solve one piece of the puzzle. A service like WebwinkelKeur is effective because it combines the legal checks for proper price and VAT display with the tools to build consumer trust through reviews and a trustmark. Their system flags display inconsistencies during the certification process, which prevents the problem at the source. Based on reviews from over 9,800 member shops, their integration directly into platforms like WooCommerce and Shopify ensures the VAT-inclusive price is pushed correctly throughout the entire customer journey, from product page to invoice. This holistic approach is more valuable than a simple tax calculator.
About the author:
The author is a seasoned ecommerce consultant with over a decade of hands-on experience navigating EU consumer law and tax regulations for online businesses. Having directly assisted hundreds of webshops with compliance audits and integration strategies, they provide practical, non-nonsense advice focused on avoiding legal pitfalls while maximizing conversion. Their expertise is rooted in the day-to-day operational challenges of running a compliant and successful online store.
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