Shopify markets - VAT - Error in primary market in EU

chrirauch
Shopify Partner
3 0 6

Dear Shopify

 

I would love to use the markets feature to calculate taxes and display prices in local currencies. However there is one big legal hurdle preventing me from doing so. We have entered all product prices excluding tax because we have some third party systems that need all prices exluding tax.

 

The problem:

In our primary market (Austria) all prices are displayed excluding tax until the customer reaches the checkout. In the checkout, the austrian tax gets added corrrectly. This is not legal in the EU, as B2C businesses need to display the prices including tax everywhere. As soon as the customer selects another country inside or outside the EU, all prices are displayed correctly in the shop and in the checkout.

 

The following example illustrates the Problem. We have a product which costs 100€ excluding taxes. So the correct prices in Austria would be 120€ incl. 20% VAT. As soon as the customer goes to the checkout, the tax is added correctly, but on all product pages the price is shown excluding VAT

 


All prices include taxes (unchecked)

Product Price in shopify: 100€

Customer Selected CountryPrice displayed on product pagesPrice in checkout
Austria (primary market)100€ excl. VAT120€ incl. 20% VAT
Germany119€ incl. 19% VAT119€ incl. 19% VAT
Belgium121€ incl. 21% VAT121€ incl. 21% VAT
Finland124€ incl. 24% VAT124€ incl. 24% VAT
USA*100€ excl. VAT100€ excl. VAT

* Note: I didn't convert the price to dollars for USA for Illustration purposes


Our shop settings:

We have a shop which is based in Austria (primary market) from which we ship clothing in EU Countries and some other countries like Australia, USA and Canada.

We activated "Include or exclude tax based on your customers country".

"All prices include tax" is deactivated.

We are registered for "One-Stop Shop registration"

chrirauch_1-1660034212352.png

 

Remarks

I know i can circumvent this problem by activating the checkbox "All prices include tax" and changing all product prices to include the austrian VAT (20%). Unfortunately this is not an option for us because of third party systems depending on having our prices excluding tax

 


All prices include taxes (checked)

Product Price in shopify: 120€

Customer Selected CountryPrice displayed on product pagesPrice in checkout
Austria (primary market) 120€ incl. 20% VAT120€ incl. 20% VAT
Germany119€ incl. 19% VAT119€ incl. 19% VAT
Belgium121€ incl. 21% VAT121€ incl. 21% VAT
Finland124€ incl. 24% VAT124€ incl. 24% VAT
USA*100€ excl. VAT100€ excl. VAT

* Note: I didn't convert the price to dollars for USA for Illustration purposes

 

QUESTIONS:

Is there still no way to have all product prices in shopify excluding tax, but still display the prices to our customers including tax in our primary market before they reach the checkout? It works for all other countries except for our primary market (Austria).

And.... How is this not a bug?

 

 

 

Replies 3 (3)
Rostislav
Shopify Partner
52 1 8

Unfrotunately , it is not possible by simply appling standard Shopify methods, unless , funny enough, you change the primary market to a non EU country. Make  Switzerland  or better UK as the home turf  for your store and  for all EU countries (includeing Austria)  your goods  will be displayed with local VAT. You will still be able to use OSS calculation by Shopify and your catalog can be populated by prices without VAT 

Be aware that some Shopify services like multicurrency , Shopify payments and Shopify shippping vary for diffrent markets.  This solution is a bit artificial but I hope this can help.

 

One more note , it is not illegal in EU to show prices without VAT before the payment is done , there is no specific reference to that in VAT Directive . What is important  is that the VAT is displayed at the moment of the payment and is recorded as such in the invoice. Local rules for invoicing may vary , but they generally follow the same rules throughout EU  when it comes to having VAT in. Local rules can be checked here https://ec.europa.eu/taxation_customs/tic/public/invRules/invRulesPublicationSearch.html

     If you intend to sell/already selling  to the UK we can offer a good UK VAT complience solution for your store , visit us at www.easproject.com

RococoDigital
Shopify Partner
7 0 2

I imagine this solution will cause other issues with import tax and other things.

Is there any intent on fixing this @Shopify ? It has taken me a long time to discover that dynamic taxes are working, just not on our primary market (United Kingdom).

ppvi
New Member
1 0 0

This seems like a bug to me, I can't imagine why this would be a feature. Given there are no other threads about it, I assume it's a recent problem.