How do I correctly set up international tax rates for my online store?

34 0 2

hello, my Shopify store is retailed at South Korea. I'm a Korean citizen too. I'm aiming to sell and ship my products to every country if possible. i'm having a hard time understanding how this work, Korean tax rates are 10% so I need to collect 10% of taxes from every customers that buys my products for me to pay it off to the government. I'm confused if I need to set up the tax rate to 10% for every country and cities or do I just set it up for south Korean tax only. I activated South Korea tax to be added to the products price but from what I'm seeing when I click on other countries the price just drops and changes I'm very confused can anyone help me or tell me how is this supposed to be set up when I need to tax every country 10% thank you.

Replies 2 (2)

Shopify Partner
190 12 29

Hi AmoIrand


VAT is indirect tax and it is always national (i.e. it exists on sales and purchases within the country) Korean VAT is arranged the same way. If you sell to Korea you charge VAT on all the sales (10 percent standard rate , 0 reduced rate) . When you sell abroad you should not charge Koren VAT, but in some cases may charge destination country VAT or GST (it is always based on registration for tax schemes in these countries) . Shopify follows that logic- if you do not tax your sales in other countries , then sales to these countries will be without Korean VAT and the price "drops". There are ways to increase the retail price for different markets so the nominal price is the same as in Korea but it is not about taxation actually - the rule is still  the same : you collect and pay  Korean VAT only in Korea. If you decide to start selling to the EU we can register you for IOSS special scheme and set up your store to collect EU VAT. In this case you will be collecting EU taxes , but they will be paid to the EU not to Korea 🙂 - the best EU and UK VAT compliance solution.
1 0 0

Hello Rostislav,

it means the taxes we declare actually are charged to the customer , let say in this case 10% taxes in the product charge to the customer ?. Then if I sale in a different country , let say the whole American continent countries , each country will have its own tax rate and price will changed automatically with the shopify application? My question is , am I going to be doing legal job only setting up the 10% for south korea ? I am also confused about it  and I am planing to sale in America from south korea . 

Thank you in advance for your answer !!