UK Tax Issue

Tourist
12 0 2

Hi,

 

We we are based in the UK and charge 20% VAT on our Taxable products to the UK & EU, and 0% outside Europe.

 

We also have non Taxable products, that we do not charge any VAT regardless of location.

 

Is it possible in Shopify to show INC VAT prices for a taxable product on collection pages & product pages?

 

But only show EX VAT prices for a non taxable product on collection pages & product pages?

 

(all our prices in Shopify are currently setup excluding VAT, with the "Show all prices with tax included" option unchecked we then select when adding products if it's taxable or not)

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Shopify Staff
Shopify Staff
20 2 2

Hi kickgame!

 

Vincent here from Shopify!

 

What you are looking to do might not be completely possible. However, could the following be a possible workaround for you on this?

 

  • Tick the box for "Show all prices with tax included", this way all your products will show the price including VAT
  • Change the prices for your products so that all the prices are showing the correct price including VAT where applicable
  • Set/ keep the rate for the VAT-free products at 0%

Now, all your prices are showing the end price, so including VAT, but when a customer buys a VAT-free product the VAT will show as 0% on their invoice.

 

This will mean that your customers outside of Europe will pay a higher price, but if you want you can compensate them for that by for example offering free shipping, or sending them a voucher, complimentary item, or something similar.

 

You can also have a look at this tutorial (click here) if showing prices both with and without VAT could solve the problem for you.

 

I hope this is a workable solution for you!

 

Best, Vincent


Vincent | Community Guru @ Shopify
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Tourist
12 0 2
Hi Vincent,

That doesn’t work at all, we can’t charge 0% VAT and just increase prices by 20% this will mess up all our accounting and tax reporting.

Also what happens if someone outside Europe purchases one of our taxable products? They should not be paying VAT, with this solution they will be!

This is a serious flaw in Shopify, looks like I won’t be migrating after all.

Thanks
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Shopify Staff
Shopify Staff
20 2 2

Hi kickgame,

 

I don't know which accounting program you are using, so it is indeed possible that the accounting program isn't able to work with a different way of processing the orders, but that is something I can't comment on.

 

You wouldn't be charging 0% VAT and just increasing prices by 20% however, as the VAT would still be calculated (for customers that have to pay VAT), except instead of 20% being added on top of your gross sales price, it would show 20% being taken from your net sales price for VAT-purposes. So, the amount of VAT being charged for customers that have to pay VAT would stay the same, and the amount of tax being charged as shown on your invoices would stay the same as well, the only difference is that the VAT is calculated from the net sales price, as opposed to being put on top of the gross sales price.

 

Customers ordering from a country for which you aren't calculating VAT would simply pay the net sales price, with 0% being shown as the applicable VAT-rate.

 

An alternative solution that could work for you is to use an app which allows you to show different prices/ tax rates for different customers; the app "Exemptify" for example would allow you to do this, click here for more information.


Vincent | Community Guru @ Shopify
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Tourist
12 0 2

Vincent,

 

Your solution still doesn't work or make sense.

 

Yes European customers that are liable to pay 20% VAT will see the correct pricing, if you include 20% VAT on product prices.

 

BUT

 

If a customer outside of Europe orders, firstly, they will see the incorrect product price on all pages, AND they will be charged VAT as Shopify isn't able to remove VAT from product prices at checkout based on location (only add)

 

I also have some products which are taxable at 20% and some products with are tax free at 0%.

 

Exemptify is also NOT an option, I spoke with the developer and even he concedes that the module only supports 1 single tax rate, so if you have a store where some products are taxable (20%) and some are not e.g. childrens shoes (0%) the module does not support this.

 

It's astonishing Shopify doesn't support this natively as EVERY other eCommerce platform does out of the box.

 

Thanks,

 

 

 

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Tourist
3 0 3

@kickgame Can you keep us updated if you have an outcome to this.

 

 

It does seems rather silly that you are able to set VAT/TAX % per item and have the option to show INC VAT/TAX EX VAT/TAX on each items.


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Tourist
12 0 2

The only real way to resolve the issue is:

 

1. Manually insert into your template code the inc & ex vat prices for taxable products.

 

2. Add a product tag along the lines of "No Tax" or something like that, to non-taxable products only, and then reference this product tag from the template code on whether to show inc or ex vat price.

 

3. Make sure this is implemented across the following pages - product, collection, wishlist, quick view, sidebar, homepage & cart.

 

I know it's incredible that you have to go to such lengths to achieve something so simple and available out of the box on all other eCommerce platforms! This is a major letdown from Shopify in my opinion!

 

I'm currently working with a Shopify developer to implement this, if you want to contact him his email is - shopify.solutions1@gmail.com

 

Thanks,

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Tourist
7 0 0

Hi! I am having the same issue, has anybody been able to solve it by now? Really unbelievable that this is even something to ask from an e-commerce platform...

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Tourist
12 0 2
I solved it by hardcoding the inc and ex vat prices into the Shopify template code.

Agree it’s crazy they don’t offer a solution for this, but this is the only option we have right now
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Tourist
7 0 0

Could you share the necessary piece of code? :) I can most probably implement it, but not really competent in coding so can't figure it our myself.

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