Removing tax for international orders from UK

Phishtitz
New Member
3 0 4

Hello


We have a store based in UK. The prices we list include tax. When we have an international order we need to remove tax. I've been told this can't be done? Is this correct?

This then flags up a huge problem: we shouldn't be charging VAT on international sales, and it’s also illegal to show ex-VAT prices to retail customers in the UK. So we’re stuck with not being able to sell internationally.

Replies 51 (51)
Sak7
Tourist
5 0 7

This is the same problem we are having here at Germany. We just had a lengthy chat with an "expert" saying that only Shopify Plus customers have that option to change their Checkout.liquid file to allow them to remove VAT from international orders. Apparently that is a $2000 + per month option, because that is what Shopify Plus account costs. The "expert" said that for security reason they do not allow merchants to have access to their Checkout.liquid (I guess if you pay $2000/month, then you get access to it). So we asked the "expert" to make the change for us. We don't need access to the Checkout.liquid, we just need the change to be made, and he kept saying they can't do it. The problem for us is that we are a young brand are generating more interest internationally. So we are losing potential business, which is also potential business for Shopify. This is VERY frustrating.

Phishtitz
New Member
3 0 4

Hi Sak7, yes very frutsrating isn't it. It's more frustarting when you get so little help from Shopify to rectify the situation.

However we've now found a way to make it work. We now list all prices in Shopify ex VAT. Shopify can work out whether or not to include the VAT at the checkout depending on teh address that  the customer enters. The missing link is how to make the prices show VAT on the product pages (In the UK it is illegal to show ex VAT prices only) We did that by following this advice https://community.shopify.com/c/Shopify-Design/Product-pages-Show-VAT-prices-on-your-product-pages/m...

Hope that helps?

Sak7
Tourist
5 0 7

Exactly. In Europe the customer is used to seeing the price with VAT, so to show it without VAT only to add it at checkout is not a good look. And what makes this worst is that Shopify posted the code to have the VAT removed at checkout. LOL!! So all the "expert" had to do is take that code and post it in our Checkout.liquid for us, and the problem would be solved. SMH!

 

Thank you for the advice. I shall give your suggestion a go. I'll let you know how it turns out.

 

Much appreciated.

Victor
Shopify Staff
Shopify Staff
1441 138 324

Hi @Sak7 & @Phishtitz,

 

Thank you for reaching out with your questions, and I know that this is a pain point for merchants in the UK and elsewhere in Europe. By default, when you have prices set to include tax (as you likely would in the UK), customers from countries where you do not need to charge VAT will still pay the VAT-inclusive price, although at checkout they will not see any taxes included in their order. I have addressed this issue in greater detail in the regional support thread we offer on the topic of taxes for UK-based merchants.

 

The best solution for this problem is what @Phishtitz recommended—namely, setting your prices to not include VAT, and then doing some custom coding to show the VAT-inclusive price on the product pages alongside the default VAT-exclusive price. This means customers not eligible to pay tax will be able to buy the product at the VAT-exclusive rate, but customers who are required to pay tax will be able to see the VAT-inclusive price as well, which they will be charged at checkout. It's not a perfect solution, I know, but it does allow your international customers to buy products at their correct prices when they don't have to pay tax, whilst also meeting the requirement of displaying VAT-inclusive rates on the website as well.

 

One other option I feel is worth mentioning is setting up a second store for international markets, which many businesses on Shopify decide to do as they grow in scale. This allows merchants to better tailor their sites to the different regions they are selling to, and would also allow you to show tax-inclusive prices on one store and tax-exclusive ones on the other. This may not be a suitable solution for either of your stores but I wanted to mention it just incase.

 

I hope this has helped but please let me know if you've any further questions.

 

Kind regards,

 

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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Sak7
Tourist
5 0 7

Hi Victor,

Honestly, the simplest solution is to have Shopify offer solution to everyone that has a paid account and not only to those that are paying $2000 + /month, because with online stores, the world becomes the customer, and not just the local market. And considering that Shopify posted the code on how to have VAT removed from the Checkout process on the Checkout.liquid, if it really is a security issue of not letting the merchant access the Checkout.liquid (except for those willing to pay $2000 + /month) at the very least Shopify should make the change for the merchant, so that the merchant personally doesn't have to make that change. That is common sense. What Shopify is saying is that the smaller merchants do not matter as much as the larger merchants, when in reality the larger merchants need less assistance because they already have a footing the market.

 

And to be even more honest we were literally on the woo commerce website looking to change hosts when we received the reply from Phishtitz.

 

Kind Regards.

Sak7
Tourist
5 0 7

So we have tried this new technique of getting our website to update the international pricing and ... it is not working. Only the collection pages display the 2 prices, but not the singular product page. And on the Cart page it doesn't either. And we have been working at it for 2 days now. On the product page, when the page is loading, the price information flashes and then disappears.

 

This is what we mean with common sense. Make that one option available to all, or, have Shopify make the changes for the merchant is it really is a security issue.

JamesONeill
Shopify Partner
4 0 3

Hi Victor,

I've also been trying to find workarounds for this problem for a while and I wanted to make you aware of some of the pain points that come from listing prices ex-VAT and calculating the total price in the theme:

  • This only works if you're just using the online store channel as other channels still have the prices listed ex-VAT.
  • Depending on the theme you're using this can be substantially more difficult than just updating the product prices in templates. Themes that have AJAX carts can be trickier to update all the price instances, especially those that only include compiled JavaScript files.

Shopify really needs a more rigorous solution for handling VAT. No workaround I've seen so far comes without significant disadvantages.

 

Victor
Shopify Staff
Shopify Staff
1441 138 324

Hi @JamesONeill,

Thank you for making this point, and yes, in the scenarios you've referenced it would be difficult/ impossible to display both VAT-inclusive and VAT-exclusive prices simultaneously. It's a known issue and limitation, and I will be sure to submit your feedback to our development team for their consideration.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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Armanov
New Member
2 0 2

We have same problems as described above. We just moved to shopify from woocommerce and now we are looking for alternative platforms becuase tax issue problem is to big flaw. Can you please inform us if there is any general solution in near future for EU shops that shipps internationally.

JamesONeill
Shopify Partner
4 0 3

Thanks for your response @Victor 

I'm not sure what you mean about showing tax-inclusive and tax-exclusive prices simultaneously. I don't think anybody has that use-case, what we need is a way of consistently showing the full domestic price across all sales channels but subtracting that tax at the checkout for overseas customers.

Victor
Shopify Staff
Shopify Staff
1441 138 324

Hi @JamesONeill,

My apologies, I don't think I was particularly clear. If you show tax-inclusive pricing, customers who are not eligible to pay VAT/ sales tax will still pay the full price of the product, but the tax rate will show as 0%. If you decide to list your prices as tax-exclusive, then this can serve as a workaround—customers who are not eligible to pay VAT pay this pre-tax price, and customers who are required to pay VAT will pay this tax-exclusive price + the correct amount of tax on top of it.

As you mentioned in your prior comment though, there are limitations to this method and I submitted your feedback to our development team in relation to this. I believe in some countries you are required to list the tax-inclusive prices on your online store, so you can follow this guide to add them alongside the default tax-exclusive ones, but as you mentioned there are potential drawbacks to this method.

I understand what you're looking to achieve here but, unfortunately, it is not possible at this time. Your feedback has been submitted nonetheless and will be reviewed by our development team.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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WoodyBrighton
Excursionist
20 0 8

I have this problem too... we are a new Australian store and want to sell internationally. Shopify CLAIMS to be able to support international sales, but a big warning to people considering using the platform is that, as Victor confirms, Shopify can't handle this basic element necessary for making international sales.

Australia has 10% VAT (called GST here) and prices are shown inclusive of this tax. But if I set the tax for an international sale to 0% (for example selling to New Zealand), Shopify doesn't adjust the sales price for the tax... it just has the Aussie selling price (which includes Aust VAT).

So disappointing!

Victor, how do we fix this?

I have just reviewed 10 supposedly leading Australian Shopify stores and none correctly remove VAT on sales to NZ (or apply NZ's 15% VAT).

Victor, can you PM me, I'd like to get a credit until Shopify can correct this.

 

 

Victor
Shopify Staff
Shopify Staff
1441 138 324

Hi @WoodyBrighton,

Thank you for your feedback on this and, as with others who have echoed similar sentiments in this thread, I can see why this is a disappointing restriction to come across. I know this is something our development team are aware of and I will be sure to pass your comments onto them for their consideration. Merchant feedback plays a large part in determining which changes are made to the platform so we appreciate the candid suggestions here.

Myself and my colleagues do not converse with merchants over the private messaging function here on the Community Forums, so please feel free to contact our support team at help.shopify.com/questions if you'd like to speak to a member of our team directly. I will say ahead of time that a credit or refund is unlikely for this complaint.

Please also feel free to let me know if you've any further questions about this matter.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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WoodyBrighton
Excursionist
20 0 8

Thanks.

Actually, Shopify have already given me a credit, and I would encourage all Australian customers and other affected customers to demand their credit also.

Under Australian Consumer Law, you can't advertise to do something and then not deliver it. In fact, Shopify's liability may not just the fees but also the lost development time incurred by users.

The error in Shopify is that when you have "my prices include taxes" checked, then for international sales it is mistakenly using the price including local (domestic) taxes as the base price, instead of first taking off the local (domestic) tax.

It is a pretty obvious error and a pretty easy fix.

Shopify knows we are located in Australia, it knows the price includes tax, and it knows the tax is 10%. All it needs to do is to use the correct base price for international sales. The math is Base Price Excluding Tax = Price Including Tax / (1+ tax rate).

Can you please let us know the expected timing for this fix?

The marketing spin is "Sell everywhere" and "Build a global store in days" when actually, if your domestic market has tax included, then you can only sell in your domestic market because Shopify can't handle international taxes.

 

Victor
Shopify Staff
Shopify Staff
1441 138 324

Hi @WoodyBrighton,

Thank you for your reply and I'm glad to hear that you were able to receive a credit from our support team. I sympathize with your frustrations here and can see how this change would make selling internationally much easier and more efficient for you. At this time I have no update on when this change is due, if indeed it is made, but I was sure to submit your feedback and comments to our development team after I responded to your prior message. I know this is something other merchants (including those in this thread) would like to see amended so I hope this is something that is addressed soon, and I will look to update this thread if/ when it happens.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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TimothyCann
Tourist
6 0 2

In January when the UK leaves the European Union, goods exported from the UK to Europe will have to be minus the VAT as this will be collected at the point where the goods enter the EU and will be charged to the customer and any due duty.

When this happens we will still need by UK law to show the price including taxes on the product.
So anyone in europe may face the prospect of having to be charged VAT twice.

As this will effect all UK shopify sites in the UK and all their sales to Europe, is this a sufficiently serious problem that shopify will have to sort? and before January 1st.

Victor
Shopify Staff
Shopify Staff
1441 138 324

Hi @TimothyCann,

Thank you for reaching out about this. I know that our taxes team monitor wide-scale tax changes such as what you've referenced here, and I know with the transition period set to conclude on December 31, 2020, merchants in the UK will be eager to ensure that their Shopify stores are equipped to adapt to this change. I believe at this time this is something we are monitoring and will be keeping a close eye on as we head towards 2021. At this time we do not have an update to share, but I will be sure to pass on your comments to our taxes team.

Kind regards,

Victor | Shopify Social Care

Victor | Social Care @ Shopify 
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WoodyBrighton
Excursionist
20 0 8

Hi Timothy,

For whatever reason Shopify seem to have stopped development on the base Shopify product some time ago. You'll see from other threads that that Shopify have been aware of this tax calculation error for a couple of years. Staff like Victor say "yes, we know it's a pain point" but the reality is they've not touched it for years.

If you want to sell to international customers, Shopify is not the product for you. The Shopify workaround is to create a separate store for each country.

We need to sell to international customers, so we're looking to migrate to Magento or BigCommerce.

Sounds like lots in the UK will have to migrate, good luck with the move!

Andrew

 

TimothyCann
Tourist
6 0 2

Is there any way to know if shopify will 'not' be providing a fix in time or even not working on the problem.

As we may well be forced to change platform as without a fix a large amount of our business around europe will become unworkable on the 1st of January. As it will with many businesses from the UK to Europe, and Europe to the UK.