I am living in France and recently started dropshipping and working manufacturers located in different countries around the world. When I tried to arrange taxes on shopify system, it appears %0 tax for all european countries automatically. I would like to ask if I need to set all VAT taxes manually for each EU country, because If my customer is located in Germany, and the manufacturer is located in China, how come there would be 0% tax for this transaction? As far as I know, only for transactions between 2 EU Countries the VAT would be 0. I'd appriciate if someone can clarify this.
That's a fair question. It's best if you set up the taxes for each country manually - feel free to check our country-specific tax guides that detail how to do that.
You'll find the links to the guides in our article on setting up taxes in the EU. We also have tax guides for Canada, Australia, India and GCC . These should contain everything you need.
To generate legal and compliant tax documents for your orders, consider using Sufio, automatic invoices for Shopify. This will make the whole invoicing process for you.
Let me know if this helps!
Dia from Sufio
Shopify will collect consumption taxes for you, but you must configure your store to do so. Thankfully, Shopify has easy steps for enabling all of EU VAT and all of US sales tax.Though Shopify does let you customize your store’s receipts with your logo and other information, it does not go all the way with tax receipt information neither offers tax reports that include all the accurate information you need to file returns quickly.
Luckily, Quaderno can help you out to automate this process.
Hope this helps!
Shopify defaults to zero as to not assume that you should be charging taxes if you shouldn't be.
If you want to set the VAT rates for countries you know you're selling to and have registered in, you can head to Settings > Taxes > Country you're updating, and click on the "Reset to Default Tax Rates" button, and we'll update your rates to the current rates we have on file.