Using the VAT System means that the value is included in the price of the product - thus will not be shown separately in the checkout. If you do not need to charge VAT because your business does not meet the VAT threshold, then Go in to the Shop Settings => Tax page, and set "Charge Tax" to "No".
To setup your tax rates:
- Go in to Shop Settings => Tax.
- Change "Charge Tax" to "Yes"
- Change "VAT System" to "Yes"
- In the "United Kingdom" box, enter the current VAT rate you charge.
- In the Europe (EC) box, you may enter a rate of VAT to charge to all other European countries, or enter 0 if you do not charge VAT on your european sales.
- If you left the Europe box blank, but do want to charge VAT on only a select number of European countries, then you can add these by selecting them from the drop down, and entering a VAT rate that will override the Europe (EC) 0 rate entered before.
- Click "Save Changes" when you are happy with your settings.
Hint: If most of your products are liable for VAT, but some are not, then individual products can be made VAT Exempt by choosing the option on the Edit Product page.