Hello,
I’m in Sweden and we have 25% VAT on most things, but 6% VAT on books. I sell both, and have resolved this issue by making a collection override, where the book category is set to collect 6% VAT instead of 25%. This works, BUT the shipping taxes don’t follow and I need help figuring it out.
According to Swedish law, the VAT on shipping follows the product sold. I if sell a football, customers are charged 25% VAT on the football, and 25% VAT on the shipping. If I sell a book, it’s the same principle: customers pay 6% VAT on the book 6% on the shipping. If they both a football and a book, the shipping VAT is based on the highest VAT-level, so 25% on the shipping.
Shopify automatically sets all my domestic shipping VAT rates to 25%, even when it should be 6% because I only sold books.
How do I solve this?
Hi,
If you only sell reduced rate products with the 6% rate then you can create shipping override. If you sell products with standard rate as well then you just have to collect the standard rate. Shopify active tax should calculate the reduced shipping rate if the product is set up correctly.
Hi,
We’re experiencing the same issue as Elkmarket. Our store sells products with different VAT rates (both high and low). Ideally, the VAT applied to shipping should match the VAT rate of the products in the order. Because of this, we can’t configure a single fixed shipping rate.
We’ve researched possible solutions and the only option we’ve found so far is switching from Basic Tax to Shopify Tax. However, due to our high order volume and the additional transaction costs from Shopify, the extra costs would be significant.
Is there any alternative way to handle different VAT rates on shipping without switching to Shopify Tax?
You can’t do this natively in Shopify.
Shopify always applies a single fixed VAT rate to shipping per shipping zone and does not dynamically adjust shipping VAT based on the products in the order. Collection tax overrides only affect products, not shipping.
Your options:
Use Shopify Plus + custom tax logic (Script / Functions) → only way to automate this correctly.
Use a third-party tax app that supports mixed VAT logic (e.g. advanced EU tax apps).
Manual workaround:
Set shipping VAT to 25%
When an order contains only books, refund the VAT difference (19%) manually.
Account for VAT in product prices and set shipping as VAT-free (not ideal, but common in Sweden).
Bottom line: Shopify can’t follow Swedish shipping VAT rules automatically on standard plans
Shopify does not dynamically apply VAT to shipping based on the tax class of items in the cart. Shipping tax is treated as its own line item and, for domestic shipping, Shopify applies a single default VAT rate (in your case 25%) rather than inheriting the product VAT logic.
So even though:
- Product VAT overrides (25% vs 6%) work correctly
- Swedish law says shipping VAT should follow the product
This isn’t something you can fully fix inside Shopify today. The platform doesn’t support product-dependent shipping VAT rates, even though countries like Sweden require it.
Here’s what you can do:
- Absorb the VAT difference for book-only orders
Keep shipping VAT at 25% in Shopify and adjust pricing/margins so you’re not overcharging customers net of VAT. Many merchants treat this as a compliance simplification.
- Split shipping into the product price (for books)
For book SKUs, increase the product price slightly and offer “free shipping.” This ensures the full amount is taxed at 6%, since it’s no longer a separate shipping line.
- Manual adjustment via accounting (post-order)
Let Shopify calculate 25% VAT on shipping, but correct the VAT split in your accounting system when reporting to the Swedish Tax Agency (Skatteverket). This keeps storefront behavior simple while maintaining tax accuracy in filings.
In Sweden, shipping is treated as a service and is subject to 25% VAT as a general rule.
The VAT rate on shipping does not automatically follow the VAT rate of the goods being shipped (e.g. books at 6% or food at 12%) when shipping is charged as a separate line item.
Only in cases where shipping is not separately charged and is inseparable from the goods price can it follow the VAT rate of the goods.
In standard e-commerce setups with a separate shipping charge, shipping should always be taxed at 25% VAT under Swedish VAT practice.