Simple idea: Tax toggle at the top?

Folke
Tourist
3 0 1

There are some major differences between countries as to how prices should be shown to consumers. I have found many old threads here on that topic, and the issue has never been resolved.

But under the hood it works pretty much the same everywhere. You have your "real" price (the one you file as revenue etc) and you are also required by law to collect tax for your government on top of that (or sometimes even for other governments). That tax goes on top of your own "revenue" price. This is about the same everywhere.

The tax rate can be different for different categories of customers (businesses vs consumers or customers in different states). The resulting amount payable therefore can be very different for different customers. This multi-faceted situation is probably also quite similar everywhere.

The big difference I see is when and how the added taxes are SHOWN to the customer. In large parts of the world, North America included, it is the tradition (and perhaps law) to display the naked "revenue" price, and people are used to getting heaps of taxes added when they check out. In Europe and Australia it is the other way round, it is required by law that you display prices with taxes included. People do not want to bother with taxes or even know about them.

But even in the EU it is not always like that. EU businesses are not consumers. They want to see the prices exclusive of taxes, as they will be refunded to them in the end anyway, so they do not care how big they are. So in a way, EU businesses are a bit like North American customers in that regard - we do not have to add taxes for them.

So if you are running a webshop, say, in Sweden, selling to both consumers and small businesses in your neighboring countries you would always want to actually charge the real" "revenue price" plus shipping and whatever tax is applicable for that type of customer and country, BUT you would like your taxes to be SHOWN and charged as follows:

  • Consumer in Finland (EU member state): Show total price (including tax) up front AND charge with the tax added.
  • Business in Finland (member state): SHOW naked price BUT nevertheless charge the tax unless they have provided you with a valid VAT number (If they have a VAT number they will pay the VAT themselves in their own country. If they do not give you a valid VAT number you must charge VAT).
  • Consumer or business in Norway, Switzerland or the US (not EU members): Show naked price up front AND charge the naked price. They will have to pay all taxes and duties, if any, in their own country

It is probably impossible to find any one setting that suits all categories of customers, but I imagine there are a few very simple measures that could be implemented in Shopify to make it as easy as possible:

- a toggle at the top allowing the visitor to choose between "Display prices with tax included" or "Display prices without tax"

- a setting prescribing the default position of that toggle for new visitors

- a setting for which country's tax should be added when displaying prices with taxes included (not necessarily the shop's home country - businesses over certain threshold levels pay local VAT to the customer's government, and VAT rates differ)

- a setting for each customer (at checkout) whether they are tax exempt or not, in which case they must enter their VAT number.

Is any of this in the works? I have seen threads about it that are over ten years old.