I'm considering an option to dispaly the same price to everyone in my store dispite where in the world the customer is located but only buyers from EU (where my shop is located) will have VAT included in the price. The non-EU-based customers will have 0% VAT but will pay the same dispalyed price that the EU customers.
The dispalyed product price is 100€ for everyone worldwide including taxes in the EU-countries.
EU-buyers will be charged totally: 83,3€ (the product price) + 16,7€ (VAT 20%) = 100€
All the rest of the customers worldwide will be charged 100€ (the product price) + 0€ VAT = 100€
How to do this in Shopify?
As I understand now the current settings in Shopify creates the following situation:
The display price is 100€ for everyone.
EU customers will pay 83,3€ (the product price) + 16,7€ (VAT 20%) = 100€
The non-EU customers will automatically get a tax reduction in the shopping cart and pay only 83,6€. Is the displayed price for them 100€ or 83,6€ in my shop?
How does this really work in practise?
Or does Shopify charge the same 100€ from everyone when I've ticked the box "all taxes are included in the price" and set the tax rate to 0% for non-eu- countries?
I don't see any guide saying this clearly what is the display price and the final price for everyone.
Help much appriciated!
I'm Ann, from the team here at Shopify 🙂
Great question! So if you set up that you want VAT included in your prices, your product prices will appear the same to all your customers. Then depending on the location of the customer, a certain amount of what they pay will be allotted to taxes, while for others, it won't.
So for example, the display price is 100€ for everyone, EU customers will pay 83.30€ (the product price) + 16.70€ (VAT 20%) = 100€ (they'll only see this breakdown during the checkout and on their invoice), then the non-EU customers will only see the 100€ price, both in your shop, during the checkout and on their invoice. You can find out more about how this setting works in our Shopify Manual on this page.
I hope this helps! If you have any more questions or concerns feel free to reach out to us on this thread 🙂
Have a great one,
Thank you for your clarification. I thought first that Shopify would automatically reduce the VAT from the product prices in the shop for non-EU-customers, but that's not case which makes it easier for me.