When you click to open Preferences tab you will see a page like one below:

VAT preferences:

You may choose to track the prices including or excluding VAT. It depends on your market preferences or pricing plan. This preference will be set as Including VAT by default. The competitor sites you add to the system will be assigned a VAT rate and type. VAT rates are determined by the country of the site, and we observe the prices directly from URLs to determine whether they are showing VAT including or excluding prices. 

You can change your VAT preferences whenever you want, and prices will be immediately adjusted according to your selections. However if you are using product costs you need to be sure that they are in the same VAT preference as the panel, since they will not automatically be updated accordingly.

Let's see the example below to understand this further:

The setting is set to show the prices including VAT for the product above. Below, you can see the same product excluding VAT:

As you can see, the price is changed from 449.00 GBP to 374.16 for pcworld.co.uk by 20% as it is the official VAT rate of United Kingdom. The VAT rates will differ between sites according to their country of origin. You can also observe the original price by hovering your pointer on the price.