Shopify Payments should not take 10% GST

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New Member
6 0 0

The new changes to Shopify Payments where they take 10% from Australian sellers who are not registered for GST is unfair and not in line with Australian tax law. I urge Shopify to overturn this.

I am a sole trader with an ABN that is not registered for GST because I don't have to pay GST because I don't earn over $75,000 so therefore Shopify shouldn't tax me either.

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Shopify Staff
Shopify Staff
523 1 88

Hey, Benjamin!

My name is Alex, I'm a guru here at Shopify!

We're legally obligated to charge taxes on Shopify invoices in Australia, as we now have a nexus there.  While it's not required for you to register your ABN for GST based on your business volume, you can op-in with your government at any time.  Once you have a GST exempt ABN, you can enter this in your admin at settings > billing, just here, beneath your invoices:

There's more information on this in our docs right over here - if you'd like to discuss in more detail, please do feel free to reach out to us at any time!  You can give us a call or start a live chat with us day or night.  We're open 24/7 for your convenience and always happy to assist!

Cheers,

Alex | Shopify Guru

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New Member
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I've tried live chat, he gave different answers to you, and emailed support. Everything seems to be half answers.

I have an ABN. It is not registered for GST. I'm not registering to pay tax when I don't need to pay tax. My business is not just Shopify. I lose money needlessly but paying tax I don't legally have to pay if I voluntarily opt-in? Are you saying that I should register for GST? Or are you saying if I put my ABN in now that I won't be charged GST because my ABN already is not registered for GST? Or do I have to apply for an exemption even though I already don't earn enough?

The workaround is to just accept payments via Paypal not Shopify payments because they don't charge me 10%.

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Shopify Staff
Shopify Staff
523 1 88

Hey, Benjamin!

Really sorry to hear that you've gotten incomplete information, and I apologize if my response wasn't clear!  This recent change is in regards to Shopify subscriptions, for the monthly fee for your plan, so this will apply whether or not you're using Shopify Payments to process your transactions.  You'd mentioned that you have an ABN, yes - if you would like to avoid paying GST on your Shopify subscription, you'll need to register that ABN for GST.  

If it doesn't make sense to register your ABN for GST due to factors outside your Shopify subscription, you're by no means obligated to do so.  That would mean that the GST charge will apply to your Shopify subscription, however.  I totally understand that's disappointing, but I can assure you that we wouldn't be charging this tax if we weren't legally obligated to do so.

I hope that's helped clarify things, and do reach out to us if there's anything else we can help with!

Cheers,

Alex | Shopify Guru

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New Member
6 0 0

That's a totally different answer to what someone else told me. The information on the tax page is so confusing. Other support people told me it applies to my payments to me from customers, and that switching to Paypal would fix it. It's like no one actually knows and is making their own assumed guesses.

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Tourist
7 0 2

Ok so I have just looked at this new request from shopify and its really perplexing - I wonder if shopify actually understand the legal terminology being used. To have an ABN is one thing, all companies must have this, but to be REGISERED for GST - which apparently makes you exempt from paying GST according to shopify - is exactly the opposite, it infact makes you liable to pay GST. Becoming registered for GST is only a requirement for companies who turnover in excess of $75,000AUD a year - below this threshold you have an ABN but you do not collect GST nor pay GST. According to the way Shopify has set this up you must put in your ABN and then claim to be GST registered in order to NOT be taxed. This is the opposite way around - if you register for GST you are then obligated to pay GST on all sales whether or not you make $75,000 or not. From what I can tell I can tick the box to say I am GST registered and this will make me tax exempt....that makes no sense.

Please clarify Shopify.

Do you actually mean that the GST will be charged only on our subscriptions if we are not GST registered i.e. if I py $100 per year to run my shop this will become $100 plus GST? Or do you mean we will be forced to add GST to our SALES.

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New Member
6 0 0

Like I said above, I've been given different answers and solutions by different people, and the documentation doesn't solve anything.

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Shopify Expert
9896 99 1706

 From what I can tell I can tick the box to say I am GST registered and this will make me tax exempt

The ABN requirement is if your business is tax exempt as per the Charitable tax concessions. Ticking the box doesn't make you tax exempt - unless of course your ABN has the tax exempt status.

The new changes to Shopify Payments where they take 10% from Australian sellers who are not registered for GST is unfair and not in line with Australian tax law. I urge Shopify to overturn this.

Ben - Talk to an accountant or have a chat with the ATO about how tax is charged. The ATO is actually quite useful for info on this front and it doesn't come with any cost. Drawback is that sometimes their call line can be a little slow.

Shopify will be sending you an invoice/charge with GST. This will be as per Aussie law and it doesn't matter if you're registered for GST or not. You'll find that businesses will have been including GST on invoices to you (and your business) with this included - though you might not have had to note that.

By not registering for the GST means that your business can not claim GST. It does not remove other businesses requirements to include. Even though the BAS statements can be a pain to fill out you should register from a finance perspective.

^ Read this with the awareness that I'm not accountant or tax specialist.

★ Winning Partner of the Build a Business competition. ★ http://freakdesign.com.au
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New Member
6 0 0

That's not my issue. I can't get a clear answer on what payments you're talking about.

Is it the subscription service or are you taking 10% from my sales? I've gotten wildly different answers from Shopify reps.

I just want clarification and clear documentation that explains if the $29 USD I pay Shopify each month is now having GST added onto (fine, I don't mind) or when I sell a $10 book on my store, Shopify collects $1 of that as GST.

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Shopify Expert
9896 99 1706

The GST will be added to things Shopify charges you for. So things like your fees, shipping lables, themes, etc. 

★ Winning Partner of the Build a Business competition. ★ http://freakdesign.com.au
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