Is sales tax the same as VAT in Ireland for online stores?

[rainandwild]

Hi everyone, I'm just looking for some clarification here. Is sales tax on Shopify considered to be the same as VAT? From what I can tell, in Ireland, these are one and the same. As I'm not VAT registered, I don't want to collect VAT/sales tax. Is it correct to change the tax rate in Ireland to 0%? And untick the box for "all prices include tax"?

Very new to all this so want to be triple sure I have it correct before opening the store!

[Nick]

Hi @rainandwild,

Great questions, taxes can be difficult to navigate even on the best of days! 

To answer your question:

Is sales tax on Shopify considered to be the same as VAT? From what I can tell, in Ireland, these are one and the same. As I'm not VAT registered, I don't want to collect VAT/sales tax. Is it correct to change the tax rate in Ireland to 0%? And untick the box for "all prices include tax"?

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Yes Shopify would consider VAT as sales tax in this instance, “sales tax” is what the US and Canada tend to call it, whereas VAT is what the EU call it. In terms of how to set this up in your store admin, Shopify has a help guide which goes through all the steps in detail which you can read here. 

Something else I always recommend is to speak your local tax office or a professional accountant to make sure you have everything in order. While we can't give tax advice or say which tax to charge, your local tax expert would know the best way to do this. Let me knowif you have any other questions!