Learn more about handling and managing your taxes while running your Shopify store in Ireland.
This thread is part of the Regional Support threads offered for merchants in Ireland. To see which other topics are available, you can visit the Irish hub here.
As of September 1, 2020, the standard rate of Value-Added Tax (VAT) in Ireland is 21%, and will be until February 28, 2021. This is a lesser figure than the previous rate of 23%, and applies to most goods and services sold in Ireland that do not fall in the reduced rate categories.
Registering for VAT in Ireland is required when your turnover exceeds or is likely to exceed VAT thresholds, which vary depending on what you or your business sells. For example, a person selling services only must register for VAT if their revenue meets or will meet a threshold of €37,500, whereas the threshold for persons selling goods is €75,000. You can review the different VAT thresholds on the Irish Tax and Customs Revenue website.
You will need to be registered for VAT in order to set up taxes in Ireland and the European Union on Shopify. If you are registered for VAT, you will see an option to add VAT registration details by heading to Online Store > Taxes and clicking on “Set up” for the European Union:
You can also ensure that your prices are set to be tax-inclusive in your Shopify tax settings, meaning that any VAT charged to the customer will be included in the price of the product. This can be enabled by checking this box:
If you’re wanting to sell your products to customers in other EU member states, then you will need to register with the Irish tax authorities to acquire a VAT number. This number can then be used to charge VAT to your customers throughout the EU, based on their location. You typically cannot charge VAT to customers in other EU countries without first being VAT-registered in your own country.
If you have a significant business presence in another EU member state, or meet a revenue threshold of sales into another state, you may be required to register with the tax authorities in that state. Many EU countries have a distance selling threshold of €35,000 (e.g. Austria, France, Spain), although there are others with different thresholds (e.g. €100,000 in Germany and the Netherlands). Some EU countries do not use the Euro and their threshold will be listed in their own currency, such as in Sweden (with a threshold of SEK 320,000). Shopify provides an EU tax reference doc that includes a list of these thresholds.
The Brexit Transition concluded on December 31st, 2020, meaning that effective January 1, 2021, new tax laws apply to sales made between the United Kingdom and EU member states, including the Republic of Ireland. Shopify offers an updated guide on what Brexit means for VAT and taxes for both the UK and the EU member countries.
A result of Brexit is that Northern Ireland has adopted a dual status and is considered part of both the UK and EU tax regimes. If you have an EU VAT registration and are based in the Republic of Ireland, and make a sale to the customer in Northern Ireland, then EU VAT is charged. If you sell from Ireland to the rest of the UK, then VAT charges depend on whether you have a UK VAT registration and the cost of the order. This graph contains more information on what VAT is charged when selling from the Republic of Ireland into the UK, Northern Ireland, and to another EU country:
If you have a question or comment to make about managing your taxes with Shopify in Ireland, please post it below.
EU VAT is not been charged to Northern Ireland though. I tried placing order on our website and it's showing UK VAT at 20% instead of EU VAT 23% to Northern Ireland. We are bassed in republic of Ireland.
Thank you for reaching out. Are you registered for VAT in both the United Kingdom and the EU, or for just the EU? As per this documentation, if you make a sale to Northern Ireland from any EU country (such as Ireland), EU VAT is charged only if you are not registered for VAT in both the EU and the UK, in which case UK VAT is charged. If you are based in Ireland then I assume you may only be registered for EU VAT, but I just want to clarify that this is the case.
Victor | Shopify Social Care
Thank you for detailing your situation so clearly. I am aware that you do not also need to be VAT-registered in the United Kingdom to sell into Northern Ireland, but if you had been this would explain why the UK VAT rate of 20% was being charged instead of the Irish 23% for sales into Northern Ireland. This does seem to be an error, as per your sources and our own documentation.
I have reached out to a member of our taxes team about this issue and explained the problem that you are having. The only recommendation they could make without looking at your store is to change your default location to one based in Northern Ireland, as this may lead to our automated tax system to charge the Irish rate of VAT instead.
However, as I cannot authenticate you and take a look at this myself, I'd highly recommend contacting our support team directly for further assistance. They'll be able to view your tax settings and try to diagnose the issue, and can send this to our tax team for them to review if need be. Please quote them ticket number #25258097 and the member of support you're speaking to will be able to find my notes on this issue and proceed from there.
If you are selling goods priced under £135 GBP from the EU to the UK, you'll likely need to register for VAT in the UK. Once you have registered for VAT and entered in your VAT number into Shopify, VAT should be charged on orders under £135 GBP automatically at checkout. More information about this can be read here on the Shopify Help Center, and I would also recommend checking out our blog post on the impacts of Brexit on ecommerce for further guidance.