hi, (NZ shopify Merchant) for every customer who pays their oder via Shopify payment gateway, I am charged a transaction fee.
Does this fee include GST?
I have registered my IRD # in Shopify.
Many thanks, @Craftasticnz
Shopify isn't required to charge tax (GST) on Shopify Payments processing fees for businesses based in New Zealand.
If you've registered your IRD number on your Shopify admin however, you will automatically be exempt from paying the 15% GST on your store's Shopify invoices, as explained on our help guide here.
Hey Kimi - does the same apply in Australia? Trying to find out if we've been charged gst on our merchant fees because it needs to be claimed back. Stripe charges gst, so I assumed shopify would too, but maybe not?
For Australian-based merchants using Shopify Payments, we're required to charge GST on Shopify Payments processing fees, as mentioned on our FAQ page here. The tax paid on these processing fees can be viewed by the Account Owner of your store via the Shopify admin under Settings > Payments > Shopify Payments > View payouts > click on Documents on the top right-hand corner.
With your Shopify subscription fees, Shopify is also required by law to charge Australian merchants GST. If you have an Australian Business Number though, then your store will be exempt from paying tax. You can find more information about this on our help guide here, as well as our tax reporting guide here under the heading 'Australia'.
Hi Kimi, so when an Australian subscriber enters their ABN, they are no longer charged GST on the subscription component of the bill but they are still charged GST on the Shopify Payments merchant fees, correct? Or does the ABN also make them exempt from GST on Shopify Payments fees (and the merchant fee total would be 1/11th less than previously)? I could be wrong but my understanding is that even if there is a GST component on the bill, the Australian customer can’t claim it as a GST credit due to the digital imports rules.
That's correct. The monthly subscription fees and Shopify Payments invoices are always completely separate from each other.
If you're located in a region, like Australia, where GST is charged on Shopify Payments processing fees, then there is no way to avoid this.
Hi, @ModelettoStore. Thanks for joining this thread.
To confirm, merchants in New Zealand won't be charged any GST for their Shopify Payments fees — at this stage, taxes on Shopify Payments processing fees are only applied for merchants located in Switzerland, the EU, Australia, and Singapore.
For your monthly Shopify subscription fees, as explained in this guide you'll need to add both your IRD number to your Shopify store and register for New Zealand GST in order to qualify for GST exemption on your Shopify subscription. This is separate from your third-party app charges, however — for these, because they're billed directly by each respective app, you'll need to confirm with the app's support team directly on whether or not their charges include GST.
While we're not tax experts, generally speaking if a business (which can include app developers) makes more than $60,000 NZD from New Zealand purchases, they are required to register for GST. This includes offshore businesses too — if they meet the mentioned threshold, they are then required to charge New Zealand consumers 15% GST, on top of their prices, to be filed with the New Zealand government. Feel free to refer to this third-party guide for more information, but as mentioned do speak with the respective app support team to verify this information against the specific third-party apps that you're using on your store.
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