Understanding and setting up taxes in Shopify

[Seipuanume]

Hello

I need help to set up the taxes in my Shopify store. A few details about my store below:

• My Shopify store is selling print-on-demand apparel and accessories through Printify.
• I have selected Printify suppliers in China, US and Australia.
• I am based in Australia.
• Free shipping 
• Shipping worldwide
• I am not registered for GST.  As this is a new business, I am not expected to register for GST until my turnover reaches $75,000.  So I am not expected to collect tax within Australia yet.
• Store is not live yet - I'm waiting to sort out my tax settings first.

I need help to understand what tax settings and/or registrations I need to use/setup to sell worldwide.

[Rostislav]

Well, it is a vast topic , I will give you the basics, but you have to be mindful of available Printify solutions. Generally , Printify offeres to use their IOSS number for delivery to EU, but no VAT for delivery to the UK. 

Products settings:

1. Set all itmes as taxable in your Products menu

Markets settings:

1. Your Markets settings have to cover all destination where you intend to sell to.

2. Ensure that you set proper currency optins for sales to other countries (also done in Markets)

3. Ensure that option " Include or exclude taxe based on customer's country" is set to on in Markets preferences. 

Shipping zones and rates:

Ensure that your zones cover all destinations and rates are available for all desinations.

Taxes and duties

1. Set tax on in EU  (should be covered by Prinify IOSS registration)

and the UK (see further)

2. For US you tecnically can skip collection of GST  if you deliver from abroad (the consumer has the option of applying use tax there  , but you have to check the arrangment with Printify on  USA  since they may have their own nexus considereations if they deliver from within USA (I will not go into this , it is along story). 

3. Do not set any overrides to the UK or EU 

4. Set colection of IOSS in the EU tax zone 

5. Set collection of UK VAT in the UK tax zone

Needed registrations:

Register for UK VAT ,we can provide that solution for you and act as VAT intermediary there. 

We can provide VAT reporting/filing in the UK

IOSS for EU should be covered by Printify (again long story) 

You can read more here:

www.easproject.com - the best  EU and UK VAT complience solution for Shopify,

Do get in touch if you have any more questions:

info@easporject.com

[Victor]

Hi @Seipuanume,

I see that @Rostislav has provided some sound advice in their post and I'll also outline some considerations you'll want to be making when setting up your shipping and taxes.

First, I'd just like to make it clear that if you want to sell worldwide efficiently, then it is likely going to take you some time to set up your store correctly. For each country and region you decide to sell to, you're going to want to make sure that you can ship your products to customers there in a way that makes sense for them (i.e. acceptably short shipping times) and for your business (i.e. shipping fees aren't too expensive). You'll also want to be aware of any duties or import fees liable to be paid to ship your products across borders, and that you are aware of your tax obligations in each place you are selling to. You do not want to find yourself in a position where you have to cancel an order because the shipping is too expensive, a customer is issuing a chargeback against you because the product is taking weeks to arrive, or that you owe sales taxes to a country or region's tax authority without realizing it.

For this reason, I'd recommend first selling to local or key markets as a starting point, and then expanding your business over time. Where you decide to sell will of course depend on what products you are selling and the cost that comes with shipping them. Given where your suppliers are, you may wish to target local markets such as Australia and New Zealand first, along with the United States. This is something worth thinking about as you look to get started.

You can set up location-based taxes for these three countries I've mentioned above, as well as for places such as Canada, the United Kingdom, and the European Union. You can provide relevant tax ID numbers you have for each region and Shopify will use this information to automatically charge taxes at checkout to your customers in those places if any is due to be paid. We recommend that all merchants take the time to research their tax obligations in each country and region they sell to, and to consult with a tax professional if they are unsure of any of these obligations. We have a variety of articles about taxes and how to manage them on the Shopify Help Center:

• General set-up steps and tax reports
• Registration-based tax settings
• US taxes

Moreover, Shopify also provides plenty of resources regarding selling internationally and all that comes with that. I'd recommend checking out our documentation on Shopify Markets, which is a key tool to optimizing your store when selling in different countries; you can use Markets to offer different regional languages, domains, and currencies on your store, while also better managing your taxes and shipping settings.

The Shopify blog also has a host of relevant articles, including this primer on international commerce and the considerations that come with it.

I hope this response has been of use to you, but please let me know if you have any further questions.