EU customers sometimes shown VAT exclusive price with "exclude tax based on country" feature enabled

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earlier this year, Shopify added the "Include or exclude tax based on your customer's country" checkbox to the tax settings. I was excited to see that as I and many others were long asking for it to be possible for international customers to check out without paying my German 19% VAT. I enabled it, and everyone was happy.

However, two weeks ago I started getting messages from various customers within the EU (such as Sweden or Poland), that they were seeing lower prices than expected while browsing my store.

In the EU, it is law that a customer that needs VAT charged (so any customer from the EU), must be shown the VAT inclusive price at any time during their visit of your store. So if you go to a grocery store to buy Milk, the price tag on that Milk must show the price that you will be paying at the counter. And the same applies to online stores such as mine.

One user also provided me with a screenshot of this happening, instead of being shown the VAT inclusive price of 159€, they were shown 133.61€, despite being in Poland. I also asked them to confirm that they were not using a proxy or VPN service to mask their IP. The Swedish customer also confirmed to me that they were not using any such a service, even providing me with their IP, which I put in an online tool and it spit out that the user was indeed located in Sweden.

As I was now actively breaking this EU law, I immediately disabled the feature and am now back to invoicing international customers manually when requested. And to get it resolved, I started a Shopify support E-Mail. However, after two weeks, I haven't gotten anywhere yet with the E-Mail support. There seems to be a fundamental misunderstanding of the issue at hand, as they have provided me with plenty of test orders they did from EU addresses that all checked out fine (ignoring that I pointed out that I have disabled the feature for the time being so this was futile), or asked for abandoned checkout data. But I keep explaining that the issue is that these customers are seeing the wrong price just by browsing the website, not in their cart, not in checkout, just going on my website and browsing through the items. But to no avail. I've even been given a lecture on how Brexit works and how its working correctly because UK customers don't need VAT charged. It's getting pretty frustrating to be honest.

I am also aware that it is difficult/impossible to debug this feature using my store as I have the feature disabled, for the above mentioned reason that doing so would actively break EU law as long as it's not working properly.

My assumption is that the IP check returns incorrect values, and makes the website think the visitor is from outside the EU when they are not. I've also asked friends from the USA when I still had the feature enabled, some were shown 159€, others 133.61€, so that was pretty random too.

A solution to this that I would be happy with would be a second child-checkbox that was something like "Always show VAT inclusive prices by default", so that only when the user checks out with an address outside the EU, the VAT is finally removed. But at any time before that, they are always shown 159€, regardless of being from China, USA, Antarctica or my next door neighbor. That way, a EU customer could never be shown the wrong price, even when using a proxy/VPN, and those that are eligible for VAT removal do get it removed during checkout.

Has anyone else experienced this issue and could provide additional testimony of this happening? I've also seen the same issue reported by a UK customer towards a UK shop, who's owner I frequently work with ever since Brexit. They were shown a lower GBP price in the store than they end up paying. I mentioned this in my support E-Mail to strengthen my case that the feature had an issue and was not only happening in my store, which is probably why they went on to give me that Brexit lecture as I was again misunderstood.

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