That sounds like something the App can help with. So you would like to discount all customers outside EU by 15.9% right? I suppose providing a discount code like NOVAT if customers are detected to be outside EU would work? And in the settings, you can select “Apply to all countries outside Europe” to only customers detected to be outside EU.
If possible, I would also like to get a deeper understanding of your use case via a 10-20 minute chat. You can contact my email here: shan(at)sequelcommerce(dot)com, and will add you to our list to send updates on development.
I didn’t see it on the Shopify app store page, but the feature seems listed on their own website.
Regardless, they don’t seem to be the only ones offering this feature, hence my curiosity: what is missing from those apps as far as geo-targeted pricing is concerned ?
Dan, would you mind me asking what you’ve done between March and now to solve for this problem? One of my main clients is suffering the exact same pains, and trying to figure out the best way through. Would love to know what others are doing, and honestly, you’re the first person that I’ve read is dealing with the problem they are, word for word. I stumbled on this post for the same reason you did. An app that allows us to set our prices based on different regions/zones and for that to be handled dynamically with geo-sniffing would be fantastic.
Until Brexit, the problem was focused on orders from overseas customers, as sales to EU customers were VATable just like UK sales. Having reported the problem to Shopify support and gotten a very clear indication that they understood the problem but were unlikely to do anything about it in the forseeable future (this was back in 2014), we evolved a strategy of compensating for charging inc. VAT prices by subsidising the shipping costs. The “delivery” page on our website explains this:
"Shipments to destinations outside the EU (including Channel Islands): VAT is not chargeable, but our system charges the same selling prices. In compensation for not deducting the VAT component, we heavily subsidise our shipping charges for non-EU destinations. For Channel Islands orders we charge standard UK rates, for overseas orders we charge the same rates as for European shipments - in both cases our charges are much lower than our cost.”
This seems to have worked reasonably well, though it’s difficult to know how much sales we lose from overseas customers who either don’t understand or don’t accept our policies.
The problem that now arises is with sales to EU customers, which UK VAT rules will treat exactly the same as overseas orders from Jan 1st 2021. The approach we had developed on this was to switch to a carrier for shipments to EU customers who would allow us to specify that VAT and duty charges on import to the EU country involved should be charged back to us, rather than to the end customer. The UK VAT savings would roughly subsidise the payment of the import VAT and duty, given VAT in most EU countries is around the UK’s 20% level, and duties for our products are pretty small.
However, all this has been overtaken by our discovery that the EU is planning to extend the VAT regime already applied to sales of digital products into the EU, to ALL e-commerce sales. This will mean that the seller will become responsible for calculating, declaring and paying import VAT to the relevant EU country of import, rather than the customer paying on import. The EU VAT MOSS (VAT One Stop Shop) mechanism that already exists for digital sales will be extended to all e-commerce sales, allowing the non-EU retailer to declare and pay VAT for all BtoC e-commerce exports to the EU in one place.
This chnage was originally planned to come into effect on Jan 1 2021, conveniently linking to the end of teh transaition period. It has now been delayed until July 2021 to extned the time for preparations due to the pandemic. That will leave an awkward 6 months but after that the Shopify policy of charging VAT-inclusive prices everywhere will no longer be a problem for EU sales, as the UK VAT included in the prices will roughly pay for the VAT due to the EU destination country.
We are now experiencing this issue as we are in the UK. After Brexit we need to remove the VAT from being included in the RRP for eu customers, as the VAT is now due in the import country to the customer. So far shopify have no suggestions to fix this. I have tried two apps but they aren’t really compatible with stores that need to hold the inventory combined or sell on other platforms like Instagram. Help!
Hi, Shopify have in fact solved this problem. If you look at your tax settings, there is a new tick-box in the settings at the bottom entitled "Include or exclude tax based on your customer’s country”. My understanding from the Shopify documentation is that if this is ticked, for destinations which are set as "tax not collected’ the price charged will be the VAT-exclusive price - it your normal published prices divided by 1.2
I too thought this was the solution, however I’ve just been through the set up for taxes with shopify support and the prices didn’t reduce for EU countries, nothing happened. The support agent said she’d speak to the tax team and the came back to me on email to say intact we needed to install one of the apps (that are compatible for our business) along side it and there I am back to square one.
that this tax feature is more for reporting accounts rather than changing the price at the checkout. Seems weird, maybe I should try again.
From you post above, it looks like this won’t be a problem from July, when the ‘one stop shop’ comes into play…
good news, the solution it works for me. Prices are displayed without taxes once you give address details and go to 2nd Checkout Step. I’ve set up taxes for the countries where taxes are not applicable.
Can you advise if your prices include taxes inside the RRP and for the counties that are tax except it is then lowering the price at check out, rather than adding?
Also are you on shopify or shopify plus. Thanks so much really want to get this working but shopify said it doesn’t work, how strange!
Hello, Georgiavarae. My prices are set to include taxes but I am not using the new tick-box I referred to earlier - for now we are selling at VAT-inclusive prices into the EU, and using the VAT savings to pay the import VAt imposed on import to the EU.
So I can’t savings to pay or refund customers’ import VAT charges - that way they still effectively get VAT & duty paid shipping as it was pre-Brexit. This also avoids another big change - from a customer viewpoint - when the EU imposes a requirement for non-EU retailers to collect the EU VAT at sale point for all shipments under €150 - the same requirement the Uk has already imposed for non_UK retailers.
I thought about doing this and using the VAT included in the RRP to send by DDP and pay the import VAT, however being swimwear we have a fairly high return rate and would not be able to then get this back and the customer would expect a full refund.
That sounds easy. the problem is, until a customer starts checking out and enters their address, the site doesn’t know where the customer is based, so can’t calculate VAT appropriately.
You’ll respond by saying "use Geolocation based on IP address”, but this isn’t at all foolproof: a customer might be buying while in another country on a business trip or holiday, or be a middle-eastern customer who will ship an address in the store’s country to get low shipping rates & then use a consolidator to forward to the middle east (happens a lot). Or might be locally-based but sending to a friend abroad as a gift, or to a holiday home.
