EU VAT on Shipping for Products with Tax Overrides

[GSOGreenwood]

We sell books (and sometimes other items) from the UK, often to the EU.

We have a Product Override group set up for books, as the VAT rate for books in most EU countries is at the secondary reduced rate.

However, when a customer gets to checkout, the Shipping Rates are always charged at the main rate of VAT for that country. I appreciate that it is possible to use Shipping Overrides to change this, but these apply to shipping rates on all orders; when we sell a non-book order to an EU country, it would use these overrides, rather than matching the order.

Is it possible for the VAT on EU/UK shipping rates to simply match the VAT rate of the order?

[TeemuEAS]

Dear GSOGreenwood, 

The regulation CLEARLY states that VAT on shipping must be the same as for underlying products. You are absolutely correct. Shopify made a fix to the issue end of last year and now it is impossible to make it right. We have made multiple tickets to Shopify, but nothing has been done. 

The only way to fix the issue is to manually make the correction in accounting. 

We are happy to discuss the issue further, feel free to reach out! 

https://apps.shopify.com/eas-eu-compliance

[GSOGreenwood]

Hi TeemuEAS,

Thanks for your reply; we do already use you guys for our EU VAT. I concur that for accounting, we can manually adjust afterwards. However, a key part of the EU VAT legislation is providing a correct and clear VAT breakdown to the customer. Obviously, this can't happen at the moment which means Shopify are in breach of EU law. Should the EU take this up with them, it is them as the merchant intermediary who will be liable for a significant tax bill.

It should really be a priority for the dev team!

[TeemuEAS]

Well that is good news 🙂 

We agree, 100%. But nearly a year has gone without any action from them.

And now their new tax "service"... You have absolutely no use for their service as our customer + what they have disclosed about the service it will remove 150€ threshold. You can opt out here: 

https://docs.google.com/forms/d/e/1FAIpQLScvO2J1t2izy8wstTbu1UlJOtuYv7Um2TedhHo-_zqRMzAD7Q/viewform

to avoid 0,25% - 0,35% extra charge by them.