Do I still need to configure VAT in PayPal if it is already configured in Shopify?
If I add my VAT registration details in PayPal, will it add VAT to each order? I do not want this to happen as VAT is already included in the prices.
Is PayPal intelligent enough to know that Shopify has already applied VAT to the order?
Hi @tmstn ,
Thank you for getting in touch. My understanding is that the tax settings you have set up within Shopify are what will apply to a customer’s order even if a customer chooses to pay via PayPal, and PayPal should not charge duplicate the taxes charged on the customer’s order. However, if PayPal are asking you to submit tax registration information, I would recommend contacting them directly to ask why this is required and how this information will then be used.
Hi @Victor_5
They haven’t asked me to submit tax information to them. There is a setting to set your domestic tax rate. I have set this to 20% ( the UK rate), but I wanted to be sure that PayPal wouldn’t then apply this to the Shopify transactions as they are already VAT inclusive.
Hi @tmstn ,
Right, I see. I cannot say with 100% certainty, but I’ve never come across an issue before where PayPal was adding tax on top of a merchant’s tax-inclusive prices, so I do not believe it will be an issue. If a customer opts to pay via PayPal, then PayPal should just be handling the payment processing and should not be making any amendments to the price of the customer’s cart. You can always reach out to them directly to check if you’re looking for clarification.