Regional Support: Taxes (UK)

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New Member
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Hi,

 

I’ve seen some videos and read posts about that topic. Will this be made more automatic or easier to manage in later updates?

Especially here in Europe every country, EU and non- EU member, has its own VATs as you know. 

Would be great if the system could automatically display the gross price or netto price/ tax free based on the customers country. 
We have in Austria regularly a VAT of 20%, and the reduced VAT is 10% for food, beverages, books & magazines, rents, public transport. 

So if a customer from Switzerland (non- EU member) orders 4 candles (20%) and 1 book (10%), I want my shop to display the correct prices for my customers country.  

Any chance this will happen? I know that would be a nightmare for every programmer...

 

thanks, Manfred

 

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New Member
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Yes that is correct, my issue is that our products are liable for VAT when over 22 but there are no VAT charges from products bought from others stores over 22. Do we need to register for VAT, are we not supplying the right paperwork?

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New Member
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We are setting up a grocery shop on Shopify and we need to charge VAT as per the following:

  1. Exempt = the product is not taxable
  2. Zero rated = 0%
  3. Reduced Rate = 5%
  4. Standard Rate = 20% on other items

This depends on the type of product that are sold. Is there a way to create different tax classes and assign products to them? We need to display prices inclusive of VAT and ensure correct taxes are charged at checkout.  

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New Member
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Hi 

 

Yes  this feature is built into Shopify. You need to code the products to reflect their correct VAT treatment. 

Also- I assume you are only selling locally?

 

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New Member
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Can you please provide some details as I couldnt find any. 

We are initially selling within UK only. 

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Shopify Staff
Shopify Staff
366 36 101

Hi all,

Apologies for the delay in my response here—there was an issue with our notifications system for this thread, and I was not aware of your posts here until I checked it today. I'll quote and respond to a number of your posts here.

@Dunne-08:


Hi. Our store is facing VAT fees when delivered to our international and UK customers and we have discovered that this is happening to our products and not happening from products bought and delivered from other similar stores. Our store is based in the US and so are other similar stores. The example I will give is clearer if I tell you from my personal experience as a customer.

I live in Ireland and work for a US clothing merchandise store. I had the store send me a t-shirt (from US to Ireland) to the value of $35 and I had to pay a VAT fee @23% on arrival to collect the hoodie.Around the same time I ordered a t-shirt, vinyl & CD from a different merchandise store where it was almost double the cost $68 but I did not have to pay any VAT on arrival, despite it costing more. I order from them frequently and never paid VAT fees.

So as you can see VAT charges occur from our merchandise but not from the other merchandise store even though we are in the exact same business and both ship using USPS. I cannot find out why this is happening, only that maybe VAT fees are calculated and included in shipping costs of other stores and we have not set that up.

Our customers from various countries have told us that they also had to pay fees on our products so it's not an exclusive problem to me in Ireland.

Do you have any idea what's going on? Any insight would be greatly appreciated.

Thank you for detailing your issue here. When you say your store is facing VAT fees when you export your products from the USA to Europe, can you clarify what is happening exactly? Are you receiving a notice to pay VAT directly, or is it a case that your customers are seemingly being charged VAT, either when they checkout or receive the products? Is your business solely based in the US, or do you have any presence in Europe? You mentioned you work for a US company but are based in Ireland—does the business have numerous employees based in Europe, and/ or physical presences such as warehouses or offices? 

From the sounds of it, the issue you're experiencing is something external of Shopify and may require consultation with a tax professional to resolve. However, if you can answer my questions above, I'll see if I can help at all.

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@FitzgeraldLobe:

Hi,

I’ve seen some videos and read posts about that topic. Will this be made more automatic or easier to manage in later updates?

Especially here in Europe every country, EU and non- EU member, has its own VATs as you know.Would be great if the system could automatically display the gross price or netto price/ tax free based on the customers country.

We have in Austria regularly a VAT of 20%, and the reduced VAT is 10% for food, beverages, books & magazines, rents, public transport.

So if a customer from Switzerland (non- EU member) orders 4 candles (20%) and 1 book (10%), I want my shop to display the correct prices for my customers country.

Any chance this will happen? I know that would be a nightmare for every programmer...

thanks, Manfred

The way pricing and taxes work within Shopify means that the tax-inclusive price will display and be charged to customers, irrespective of whether they are due to pay VAT or not. If they are due to pay VAT they will see the correct tax amount charged as part of the cost, whereas customers not required to pay VAT will still see the same price but their tax rate will be set at 0%. This is how the process works if you have taxes included in the price of your products.

However, you can charge both tax-inclusive and tax-exclusive prices if you change your Shopify settings so that the prices shown on the storefront do not include VAT, and then it is added on at checkout if a customer is required to pay. If you are required to show the tax-inclusive prices on your storefront, you can make some edits to your theme to have both prices display. This process is detailed in further detail in my opening post for this thread.

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@pb_ms:

We are setting up a grocery shop on Shopify and we need to charge VAT as per the following:

1. Exempt = the product is not taxable
2. Zero rated = 0%
3. Reduced Rate = 5%
4. Standard Rate = 20% on other items

This depends on the type of product that are sold. Is there a way to create different tax classes and assign products to them? We need to display prices inclusive of VAT and ensure correct taxes are charged at checkout.

 I believe this should be possible using our tax override feature. You'll be able to create collections specifically for this purpose, and then create a tax override to apply a specific tax rate to products you've added to the collection. I'd recommend checking out our guide on this over on our Help Center.

Kind regards,

Victor | Shopify Social Care

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