How can I refund only the tax amount from a sale?

[karamba3d]

Hi, we have a customer who purchased a product from us with tax prices. According to EU laws, if they have a VAT number, tax should not be charged. I am wondering if it is possible to only refund the tax amount, but not affecting the actual cost price of the item sold. This is important, as then the invoice generated automatically will still show that tax was charged, but the item itself is discounted. Can someone please advise how i can only refund tax amounts?

Thank you

[Nick · Accepted solution]

Hi @karamba3d,

Thanks for getting back to me, I see what you mean now and see why you need to only refund the tax aspect here. I looked into this with our higher level support team and it's not possible to refund the tax portion of an order without it affecting the actual order price itself. Because of this, your best next step would be to cancel/ delete the order and create a draft order and mark the tax as free as well as the order paid and send the new invoice to the customer? I completely understand this might not be ideal, but it would be your best bet in the current circumstance. 

[Nick]

Hi @karamba3d,

Nick here from Shopify. Great question! 

It's certainly possible to refund only parts of an order should you want or need to. Once you know the tax amount which you want to refund you can take the following steps to do so: 

1. From your Shopify admin, go to Orders.

2. Click the order that you want to refund.

3. In the Order Details section, click Refund.

4. Enter the quantities of the products that you want to refund. Any products with a quantity set to 0 won't be refunded: The Refund amount (not the Total available to refund amount) is updated, minus any shipping charges. You can manually edit this amount (for example, to charge your customer a restocking fee). You can also add a refund for any shipping charges.

5. Optional: Enter the shipping amount that you want to refund into the Shipping field.

6. If you've shipped the items but your customer hasn't returned them yet, then uncheck Restock items. This checkbox is visible only if you're tracking inventory for the items included in the order.

7. Optional: Enter a reason for the refund.

8. Click Refund to issue a refund for the items that you've chosen.

Hopefully, this helps and answers your question!

All the best, Nick

[karamba3d]

Hi Nick,

thank you for your answer. I did do the refund in this manner. However this refunds an amount from the total cost of the product, and not the tax portion of the payment. Therefore if I generate an invoice with the partial refund, there is still tax calculated in the invoice. Any workarounds to only refund the tax amount?

[Nick · Accepted solution]

Hi @karamba3d,

Thanks for getting back to me, I see what you mean now and see why you need to only refund the tax aspect here. I looked into this with our higher level support team and it's not possible to refund the tax portion of an order without it affecting the actual order price itself. Because of this, your best next step would be to cancel/ delete the order and create a draft order and mark the tax as free as well as the order paid and send the new invoice to the customer? I completely understand this might not be ideal, but it would be your best bet in the current circumstance. 

[karamba3d]

Hi Nick,

many thanks for your help! It would be great if this feature was somehow
available, or if you know of any plugins that could potentially do this. Of
course it would be great if all our clients declared their tax free
eligibility beforehand but this we cannot garantee.

Thanks

[Nick]

That would be ideal. I'm sure you're aware of this, but in the instances that they do make you aware of this, you can apply tax overrides and exemptions for VAT through the Shopify admin. You can see the Shopify help document for this here. 

[karamba3d]

But can i override a tax amount for a sale that has already been made? We
have a plugin that eliminates tax should a customer verify their VAT number
which works quite well already.

[Nick · Accepted solution]

Hi @karamba3d,

Apologies for the delay on a reply to you on this. It wouldn't be possible to override a tax amount on a sale which has already occurred, it would only be able to be applied before an order is made. This is something which would apply for most discounts or reductions when buying online. It would be difficult to add an override or exemption after the sale has occurred.  

[CH-O]

I am having the same issue. The tax amount should automatically adjust based on the refund, or there should be a place to adjust tax payment....why am i or the customer forced to over pay tax because a discount is given after the sale...makes no sense

[Cleo_Qc]

Is there a workaround now?

We have customers who buy through the website and then send in their tax exempt paperwork.

While we can refund the sum through shopify it wrecks our accounting software because a lump sump refund simply does not have enough info in it to be considered a tax refund.

[Nick]

Hi @Cleo_Qc & everyone in this thread, 

Thank you for all your feedback on this. I can definitely see why this would be a pain point for you all and why the workaround might not be as applicable as it could skew your accountant books on the refund. I have added this latest feedback to the feature request for this topic and made the development team aware of it as well as the pain points. 

[ittner1872]

Hi!

Has there been any progress on this issue. I am faced with the same troubles when refunding orders. 

Thanks. 

[Nick]

Hi @ittner1872,

There's still no further update on this, I'm not able to offer any timelines but I've made a note to update this thread if it comes to fruition! 

[elinahlberg]

Hi Nick

---

Because of this, your best next step would be to cancel/ delete the order and create a draft order and mark the tax as free as well as the order paid and send the new invoice to the customer? I completely understand this might not be ideal, but it would be your best bet in the current circumstance. 

---

Can you expand on what you mean by marking the new draft order as paid? Is there a way to move the payment from the old order to the new one, so that the customer won't need to pay again?

[footclothes]

I realize this is a late message to the party but I figured out how to do it. It's still a workaround, but more pain for you than the customer.

If you go into customers and mark the customer as tax exempt and THEN go edit the order - remove all current order items and add the exact same order items - it will take off the tax and then specify the refund amount that should be sent to the customer. Essentially you're removing all the prior items that were taxed and replacing them with the exact same items, but after updating the customer, tax doesn't populate. Note that tax on the shipping amount can be refunded only if you are refunding the shipping since that's not a resale item for wholesalers.

[TJ_Biddle]

Works! Thank you!!!

[lyschelw]

I have customers that select "pick up" when they are out of state.  Then they get charged tax AND I have to send another invoice for the shipping. And unfortunately after the items are fulfilled we can't even delete the items and re add to get rid of the shipping.  The option of deleting and resending costs us more money since we don't get our fees refunded.  Why can't we have control over the tax! $2 here, $2 there REALLY adds up!

[Pbmauk]

My solution is to edit the order, remove and restock each item, and then add them back in to the order with the client marked as "tax exempt". It is a pain, but it works. At the end, the refund amount should be equal to the tax charged. 

[merrieck]

I was just trying out your solution and I'm wondering what you do about items that have already been fulfilled. I can't edit the order once it has been fulfilled. Am I missing something?

[TJ_Biddle]

I have an order like this; I'm ducking out for the day - but left a note for myself later. I plan to:

• Update the custoemr
• Unarchive the order
• Cancel fulfillment
• Edit the order to replace the products and recalculate tax
• Fulfill the order (Not notify the customer to prevent extra notifications)

I expect should work

[TJ_Biddle]

Works! Thanks!

[Sam-123]

This sounds like the best news yet. On the 6th time of reaching out to @Shopify Support in frustration regarding these issues, showing the detailed screen recordings on how the reports are skewed.  I finally got an answer that looks promising. 

I've attached a screenshot of our conversation and you can see outlined in green that they have determined the issue and plan to fix it within 48 hours. I can't believe my eyes when I read this.

I'm not going to count on it but this seems very promising!! I guess we'll wait and see. 

[mnagelmann]

Was the solution ever implemented @Sam-123 ?  We are also having this problem.