Different VAT rates while selling internationally

Elkmarket
New Member
2 0 0

I have an issue I can't figure out. Bear with me.

I'm in Sweden and charge 25% VAT on everything except books and magazines, which have a 6% VAT. I've created a tax override for all books and mags and it's working very well for orders going to Sweden and the EU. But here's the thing: 

When I sell something outside the EU, the customer is charged the price shown in my store front MINUS the 25% VAT, which is all well until someone wants a book - and the price still shows as -25%, when it should be -6%. Can someone please help me figure this out? 

Thanks!
Lotta

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Victor
Shopify Staff
Shopify Staff
886 78 219

Hi @Elkmarket,

Thank you for getting in touch and for detailing your question so clearly. Does the tax override you have set up only apply to Sweden, or do you have this override in place for other regions you sell to outside of the EU? Am I also right in assuming that the prices of your books are listed with the 6% VAT rate in mind, rather than 25%? What I mean by this is that if you're wanting to charge 75 SEK for a book, for example, you would list the tax-inclusive cost of the book at 79.50 SEK (75 x 1.06) and not 93.75 SEK (75 x 1.25)?

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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Elkmarket
New Member
2 0 0

Hi @Victor!

Since I'm not collecting tax in any other countries than Sweden, I can't do a tax override for other countries. The only option is to have the standard VAT deducted for all customers outside the EU, which works fine for all products except books/mags since the standard VAT (25%) doesn't apply to those. And you are right about the prices - the listing is the base price+6% VAT so when the system deducts 25% I lose a lot of money.

I recieved a reply from the chat support saying I need to install a third party app and then duplicate all books/mags listings so there's one listing including VAT and one excluding, and then hide the ones with VAT included from customers outside the EU. I'm too overwhelmed by the amount of work and the cost for the third party app so right now I'm collecting orders through email instead and hope Shopify will come up with a solid solution for this - I can't be the only shop selling products on different VAT levels to countries both within and without the EU.

Thanks for your reply!

Lotta

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Victor
Shopify Staff
Shopify Staff
886 78 219

Hi @Elkmarket,

Okay, I see—thank you for the explanation. If you are listing your products with taxes included and have set the prices with the 6% tax rate in mind, but that 6% tax rate is an override, then yes, when you sell to countries where no tax is charged then the base rate of 25% will be deducted rather than the override rate of 6%. It's an unfortunate quirk of the system and I can appreciate your frustration with it.

There'll be apps that can help with this which you have referenced, and there is also Shopify's international pricing feature that may be of some use to you in this scenario. Being on the Shopify plan ($79 USD p/m) allows you to set price adjustments for different regions based on percentages, whilst merchants on the Advanced plan ($299 USD p/m) are able to set custom price points for different countries and regions. Even if this is not a viable option for you at this time, this might be worth considering in future as your business grows, or using the third-party apps that you were told about.

Thanks again for reaching out and please let me know if you have further questions.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
 - Was my reply helpful? Click Like to let me know! 
 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

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