Hi, I’m building a store for an online coffee roastery. The owner says that we need to charge 9% VAT for coffee beans and 21% for everything else. I’ve set up everything needed to collect VAT and I’ve created a VAT override to charge 9% for coffee products but when I try and check out, it is charging a different amount.
For example, I’ve added €49,00 of coffee and a €25,00 t-shirt. Total tax is €8,39. Anyone know how it’s calculating that?
I guess I don’t how much Shopify is automatically charging for VAT on the product that I did not apply a custom override.
The price listed includes the charged tax. Let’s have a look at the t-shirt that costs 25 EUR (the price already includes the tax).
The price with the tax is 25 EUR (which is 121% of the price without the tax). The price without the tax is: 20, 66 EUR. The tax is then 4,34 EUR —> which is exactly what the checkout page shows:
And with the coffee example: Coffee is eligible for 9% tax. If the price with tax is 49 EUR, the price without the tax is 44,95 EUR. Then the tax is 4,05 EUR.
—> 4,34 EUR (T-shirt tax) + 4,05 EUR (coffee) = 8,39 EUR (the total tax)
