Magento - Product prices with and without VAT change

Question

I have set up two tax rates based on uk + eu tax (including vat) and rest of the world tax rate (excluding vat).

All works fine and the correct tax rates show on the checkout and in the invoices but there is a problem: if you purchase something and you are from a non ey country then the frontend price reduces by 17.5% - the tax rate i have configured.

I would have thought that the prices shown on front end wouldnt change?

Any ideas?

Answer 1

That's a setting you can control in the admin. I believe it is called "catalog prices include tax" or something like that...