When setting up tax rates, you can choose to add or subtract rates, which makes a significant difference. The difference is how the tax rates will be reflected in the price of the services.
However, if you are not a VAT payer, you do not need to worry about setting the tax rates.
Added tax rate
If you select the added tax rate, the price of the service automatically increases by the set percentage.
In practice, your service costs €100 without the tax rate. You set the added tax rate at 20%. The price of the service therefore automatically adjusts and instead of the original €100, the service now costs €120 (€100 + 20%).
On your Booking Website, customers see that the service costs €100, the tax rate €20 and they pay €120 in total.
Deducted tax rate
If you choose the tax rate deducted, the set prices remain the same. This option is great if you want to show customers the tax rate, but it doesn’t affect the total they pay.
For example, you have set the price of the service to €100. You choose a tax rate deduction of 20% for this service. The price of the service remains the same, i.e. €100, with the tax rate included.
On your Booking Website, customers see the total price of the service - €100. During checkout, they see the price broken down to service price - €83.33 and the tax rate of €16.67.