Help with tax charges for exports outside of UK

Technical Q&A
1

Hi all

I need some help with tax setup.

We are a UK based business so do not charge the 20% VAT to orders that are shipped outside of the UK.

We are in the process of setting up the link from shopify to our quickbooks accounting package so have changed prices on the website to show including the 20% VAT charge for UK orders and this is then exporting into Quikckbooks.

After guidance from Myworks whos software we are using for the link i have ticked the box in taxes and duties ‘Include sales tax in product price and shipping rate’

However for orders outside of the UK the VAT is still being charged VAT so i need to change these to zero rated for VAT so the tax is removed.

Can anyone tell me how to do this.

I need to remove 20% tax on orders going to the following areas

Jersey

Guernsey

Isle of Man

EU

Rest of the world

Thank you

2

Hi there, glad to help! This is fundamentally a Shopify Tax Setting you’ll want to check directly in your store.

Step 1 — Set up your tax overrides in Shopify

  1. Go to Shopify Admin → Settings → Taxes and duties

  2. Under your United Kingdom tax region, look for the option to manage Tax overrides or specific countries/regions

  3. For each of the following, you’ll want to set the tax rate to 0%:

    • Jersey

    • Guernsey

    • Isle of Man

    • EU countries (you may need to add these as individual countries or as a group)

    • Rest of World

Note: Jersey, Guernsey, and Isle of Man are Crown Dependencies and may appear under a separate section in Shopify’s tax settings rather than under UK regions. If you don’t see them listed, check whether they appear as separate countries in Shopify’s tax country list.

Step 2 — Verify your shipping zones match

Shopify uses your shipping zones to determine which tax rules apply. Make sure you have shipping zones set up for these territories — if an address falls outside your defined zones, Shopify may default to your standard UK rate.

3

So the issue is that ticking ‘include sales tax in product price’ makes Shopify bake the VAT into everything by default. You need to set up tax overrides for those regions. Go to Settings > Markets and Taxes, find your international markets (or create one for Channel Islands if Jersey isn’t already separate), then under the tax settings for that market you can set it to not charge UK VAT. Are you using Shopify’s native Markets feature or just relying on the old tax overrides by country?