[b]To clarify what we want to do here is:[/b]
All sales of goods and services in New Zealand must contain a 15% tax element known as GST.
All our products prices are already GST inclusive and displayed as such on the site.
We do need to be able to show the GST component of any sale made. eg 'Includes GST of: $5.00'
This should not add additional tax to the total.

My understanding is that this is how the current 'Apply VAT Rules' options is intended to work however when I check this option nothing appears to calculate although the labels at check out do change.

If I alternately use the 'Tax Schedules' to create my 15% tax rate it is adding the GST to my sales total.

There must be a solution to this as both New Zealand and Australia both calculate GST in a similar way, we can't be the first people to come across this issue!

[size=7][b]Updating in case anyone else has similar issues in the future[/b][/size]

After further investigation we seem to have this working.
[list=1][*]In Our initial setup we only had one potential shipping country)new Zealand)
We turned on 'United Kingdom' as an option, this then calculated our VAT/GSTY as expected, showing the GST content of our total.
We then turned 'United Kingdom' off as a possible shipping option and everything seems to continue to work as desired.[/list]
Why this works I'm not sure but we have cleared cache and recycled app pools and everything still seems to be working.

Thanks for posting your solution... It definitely seems odd though.

Can anyone else duplicate this finding? Should we consider this to be a bug?

Hi Will,

After futher investigation, I found that if you do not set a default rate with the tax scheduler it will add the TAX / VAT / GST onto the product price.

What I was doing wrong was adding just a country rate and leaving the default rate as 0. this make the store calculate TAX / VAT / GST ontop of the product pricing.

If you set a default rate then add a country with a rate, TAX / VAT / GST gets calculated with the price instead of adding it ontop.

Going forward if anyone wants to calculate the GST wihtin the price, set a default rate and a country rate.