If you are migrating to Magento CE 1.8 one of the big upgrades is how the VAT / Tax is being handled.

The configuration looks very much the same as in previous releases, however the way there has been many changes behind the scenes including many fixes on VAT rounding.

You can read a lot more about these fixes here http://www.magentocommerce.com/knowledge-base/entry/magento-ce-18-ee-113-tax-calc#overview.

One the big changes if you are setting up the store from scratch or upgrading and editing the VAT / Tax settings is that you cannot include rules that have ‘Zero Calculations’. So for example if you are selling B2C from the UK then an products in the order for the USA would incur “0%” VAT / Tax (whilst the shipping would still incur 20%)

In the past you could have rules set up with the “0% rate” used – so that if the rate increased and you needed to change the rate you could do, without having to create the rule – it was there – but calculating “0%”

well this is no more – no VAT / Tax – no rule.

It does make for a cleaner VAT / Tax dashboard… and if you really want to still use these then there are some code hacks that seem to allow it (but we havent tested them)