TAX RATES
Within the tax settings you can control how taxes are applied to your products, set-up tax classes e.g. standard rate, exempt etc.
Note: For tax to be analysed in the sales reports etc you need to set at least one tax rate being the Default tax class.
Then depending on how you want to enter your prices within your catalogue will determine if you need to check the 'My product prices include tax' checkbox:
When you add or edit a tax class you can set the tax rate and also set if the class is the default setting for your store:
Tax overrides can be set by location:
The tax classes you have set can then be applied to each product as needed within the products 'Advanced' tab :
