VAT is removed instead of being 0%

Hi Everyone,

This is an update regarding a recent forum issue, which has now been addressed via a support ticket. The following clarification and solution are provided for reference.

The behavior you encountered is the default way WooCommerce handles VAT-exempt orders: when an order is marked as VAT-exempt, WooCommerce removes the tax line entirely instead of displaying a 0% rate. This can cause issues with certain accounting software.
To ensure compatibility, We’ve prepared a PHP snippet that automatically adds a 0% VAT tax line to VAT-exempt orders. You can add this code to your theme’s functions.php file or use a “Code Snippets” plugin.

add_action( 'woocommerce_checkout_order_processed', function ( $order_id ) {

 if ( ! $order_id ) {
 return;
 }

 $order = wc_get_order( $order_id );
 if ( ! $order ) {
 return;
 }

 // Check if VAT-exempt
 if ( $order->get_meta( 'is_vat_exempt' ) === 'yes' ) {

 // Avoid duplicates
 foreach ( $order->get_items( 'tax' ) as $item ) {
 if ( $item->get_name() === 'EU VAT (Exempt)' ) {
 return; // Already added
 }
 }

 // Create 0% VAT tax item
 $item = new WC_Order_Item_Tax();
 $item->set_name( 'EU VAT (Exempt)' );
 $item->set_label( 'VAT' );
 $item->set_tax_total( 0 );


 // Attach to order
 $order->add_item( $item );
 $order->save();
 }

}, 20 );

Thank you!

Best regards,
Taha