Magento - Product prices with and without VAT change

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开发者_开发技巧 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?

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

Silvo is right but I would say that this is exactly what you'd want to happen. If you are selling B2C in the UK (and many other EU countries) then you have to show the prices in the catalog inclusive of VAT. However, if your customer has registered and has a shipping address outwith the EU then you want them to be shown the price net of VAT because you shouldn't be charging them VAT.