Shopify Tax randomly charging tax incorrectly

[jgd1955]

I help manage a store climb-europe.com and upgraded to the new Shopify tax. Most of our products (maps, guidebooks) are zero rated in the UK and we have used the category Books in media for all of those products.

Most of the time this works and no VAT is added to an order for UK shipments, but randomly Shopify is adding 20% VAT to some orders. There doesn't seem to be any reason for it.

Anyone else experiencing the same?

[PK2023]

Hi,

We have a bit different but similar issue going on. In our country the VAT is 9% for shipping and for some reason at the check out the VAT "charged" for a 8.95€ shipping is almost 10€ which doesn't make sense at all that it is more than the actual shipping cost. Shopify has just ghosted me with this even after reaching out to them multiple times. Please let me know if you get any reasons behind this weird VAT behaviour since it might be related.

[mdodesign]

We have just experienced this today! Turns out that the Shopify Tax system that calculates the VAT on products based on their category isn't very accurate. If a product is a Mug it charged the VAT if it was a Greeting Card it didn't charge VAT.

We have changed out Tax Service back to "Basic Tax" and resolved our issue.

Go to: Settings > Taxes and duties > United Kingdom > Tax Service

Setting this to Basic Tax resolved our issue.

[MarcelW]

We had exactly the same problem. My accountant noticed it today, so we had to change all invoices on which an incorrect VAT rate was used. Very annoying.

[jgd1955]

I flagged the issue to Shopify support and they suggested it was a 'latency' issue and that Shopify tax wasn't availble so the system had fallen back to basic tax.

That in itself is worrying, but we switched Shopify tax back on as they suggested and we will forward any orders that have the incorrect VAT. Touch wood, none yet.

[mdodesign]

Shopify confirmed to us that the Shopify Tax was set to the incorrect VAT rate for some product types! This is fairly unacceptable, for really large stores that could have cost tens of thousands of pounds in lost revenue / incorrect VAT payments.

[PK2023]

Another problem was that the new rates were not implemented for VAT exempt customers either. We were able to get the correct vat rate (9%) by changing the category but when testing vat exempt orders they deducted the wrong rate (21%). Make it make sense 😄

[jgd1955]

Shopify support truly are woeful on this issue.

We have given them details of 3 orders since we raised this issue with them on February 7 and absolutely zero repsonse to ticket 54836057

This was their response on Feb 7:

Thank you for reaching out again. I understand how frustrating it can be to deal with incorrect VAT charges, especially when all your products are correctly categorized as books, which should be zero-rated.

I wanted to inform you that I have checked the details regarding your concern and escalated the case to our internal team for further investigation. They will be reaching out to you via email with more information and assistance.

Please keep an eye on your inbox, and thank you for your understanding and patience as we work to resolve this issue.

If you have any further questions or need additional support, feel free to reach out.

[PK2023]

Hello, Same issue here. I have to constantly keep the ticket open since it keeps closing due to lack of answer from Shopify other than the automatic answer you also got.

[jgd1955]

It truly is pathetic from Shopify Support.

Shame as it works well as an IOSS solution for goods shipped to the EU

[jgd1955]

Well it seems that Shopify support are just washing their hands of the issues surrounding Shopify Tax and UK VAT.

They keep closing my support tickets without any resolution. This was from Feb17.

Needless to say there ahsn't been any attempt to contact me by Shopify.

And they charge for this service?

Hello Jonathan,

Sherwin here, your Shopify Support Advisor. I recently had the opportunity to assist you with your inquiry about Shopify Tax, and I'm reaching out to ensure you have all the support you need as we work through this together.

Your commitment to providing a seamless experience for your customers is truly commendable, and I'm here to help you every step of the way. I understand the importance of resolving the VAT application issue, and I'm actively coordinating with our tax experts to provide you with the insights and solutions you need. Rest assured, I'll be adding all the details from our conversation to your existing ticket to ensure it receives the attention it deserves.

Please keep an eye on your email for updates from our team. If you have any further questions or need additional assistance, don't hesitate to reach out. I'm eager to support you in achieving a seamless and compliant tax setup for your store.

Thank you for your trust and cooperation, Jonathan. Wishing you a fantastic day and looking forward to resolving this together!

[PK2023]

I have already 3 tickets permanently closed since I haven't received any replies to my inquires asking if there are any updates. Today I started fourth conversation from the same matter. Let's see how long does it take them to close this one as well.

[jgd1955]

Shopify Support must be one of the worst I've seen from a SAAS company, especially as Shopify Tax is not free for some merchants