Here's a brain twister for you.
Concerns: I don't want my customers to receive the product and then find out they were supposed to pay tax. I also don't want my customers to pay tax at my store's checkout if they didn't need to pay any tax.
Background: My Shopify (clothing) store is 100% online as I don't handle any inventory and don't have an office. My store is not registered as a company. I use Printful as the dropshipper (Print on Demand) for all my products I've designed. Printful's fulfillment centers are located in the USA and EU. My store's location is Japan as I have a personal bank account and credit card from there that I use to pay Shopify and Printful.
I plan to sell my products to USA, UK, EU, Australia, Canada, France, and Germany. I don't plan to sell to customers in Japan.
Do I need to charge tax for my products?
I believe I need to charge VAT for EU customers, but am not certain.
Any guidance would be greatly appreciated.
Cheers and thanks in advance!
Nick here from Shopify.
Great question and I'm glad you asked as taxes can be difficult to figure out even on the best of days. The first thing I will suggest which I always suggest is to visit your local tax office or a professional accountant to discover your local tax laws and how they pertain to you selling online. Shopify is not a tax expert as there are so many different tax regions across the globe. Seeing a local tax office or an accountant who knows your area and tax laws is definitely the best option. I will, however, say, by the sounds of what you have said, it does seem like you will be subject to the tax laws of Japan by having your store address and your bank account based there but charge VAT for EU customers and not for others. Shopify has a helpful guide on all things to do with taxes for stores based outside of the US which you can see here.
I hope this helps and please don't hesitate to ask should you have any other questions about this or anything else.
All the best, Nick
No problem at all. Something else which might be useful for you is understanding tax overrides and exemptions. For example, if you wanted to make certain products or a collection exempt from a tax rate such as VAT you can apply it. Shopify also has a great guide for this should you want to look into it and learn more which you can see here.