Which pricing converts better: tax-inclusive or tax-exclusive?

Some products are built for B2C, some for B2B, and some serve both.

For B2C, tax-inclusive pricing generally leads to higher conversions.

Consumers care about the total price they pay. Seeing a higher price at checkout because tax was added can reduce trust. It can also lead to more abandoned carts.

For B2B, tax-exclusive pricing is often preferred.

Businesses can often recover VAT/GST as input tax. The tax is mainly an accounting item, not part of the actual cost. They also expect the base price and tax to be shown separately.

What if you sell to both B2C and B2B customers?

How do you maximize conversions without maintaining separate pricing for each audience?

The same question led us to add Tax Behavior Settings in Kelviq

Merchants can configure how prices are displayed and calculated for B2C and B2B customers, making it easier to optimize the buying experience while staying compliant with tax rules.

We learned there is no single right way to display taxes.

B2C merchants often optimize for a frictionless buying experience.

B2B merchants often optimize for accounting clarity.

After all, conversions should be the ultimate goal for every pricing strategy.