My business is VAT registered in the EU meaning I need to collect VAT from my EU-based customers. So far I have not set anything up for this and have just been calculating it myself, e.g. if I sell a product for 100 EUR to a customer in France I pay 20 EUR in VAT, if I sell the same product to a customer in Sweden I pay 25 EUR meaning slightly less profit for me.
I spoke to Shopify support and they recommended that I set up the automatic taxes which would mean VAT is calculated and added at checkout. However, I’m concerned this will lead to abandoned checkouts as the price at checkout will be different than on the product page. I think American customers are used to this but Europeans not so much. I’m European myself and I’d find it annoying if the price suddenly went up considerably at checkout and it may or may not stop me making the purchase.
I’d be grateful if you could share your experiences on this matter. Does it put a lot of customers off completing their purchase?
Thank you for reaching out and for outlining your problem. The good news here is that you can set up location-based tax settings within the Shopify admin, allowing you to include or exclude tax based on your customer’s country. Enabling this setting means that you could include VAT within product prices for EU countries, for example, while keeping product prices tax-exclusive when selling to US-based customers.
This feature can be used in conjuction with various Shopify Markets features to make selling internationally and localizing your store for the countries and regions you sell to much easier.
Thanks Victor. However, this isn’t what I was asking. I want to know other people’s experience of adding VAT at checkout for European customers. I think this is expected in the US but European customers expect to see the final price on the product page (or maybe with shipping added at checkout). I’m asking if people will be put off when they suddenly see a considerable amount added on.
Generally I do think it has the potential to be off-putting as most customers in the European Union will not be accustomed to having VAT added on at checkout. You can try and offset this by having clear messaging on your product pages that indicates that VAT is not included in the listed price and will be added on at checkout so it does not come as a surprise.
As mentioned in my last post, however, you can make it so that VAT is included in product prices for EU-based customers while sales tax is excluded and added on at checkout for US-based customers to avoid this problem altogether. This is outlined in the post I shared in my last reply:
If you sell internationally, then you can include or exclude taxes in your product prices based on your customer’s location. If you enable this setting, then customers in countries or regions such as the United Kingdom see prices inclusive of their local value added tax (VAT), or exclusive of taxes in countries or regions such as the United States, where buyers expect to see taxes added at checkout.
This feature can be enabled in the Taxes and duties section of the Shopify admin.
Sorry, I’d misread your first reply. I hadn’t realised it’s possible to add different tax rates based on location on the actual product page. I thought it was only possible at checkout. I’ll look into this option.
You would be using Union OSS VAT scehme and it is possible to set the store either to display the same price to all EU markets and collect VAT inclusively (so in France the price is 100 EUR with 20 percent VAT inclusively and in The Netherlands it is the same 100 EUR with 21 percent VAT) . Alternatively, you can set the shop in such a way that the base price is the same , but country retail price differs base on VAT rate). In both situations the end customers will see final price on the storefront. Let me know what you want to see and I can show how to do it.
I am afraid it is not possible at the same time in one store. If you want to test it, you perhaps should try to set up the store with exclusive VAT and compare the sales to what you have now with VAT inclusive sales. Out of my experience I can tell you that EU and UK customers react negatively to VAT being added at the checkout. That has been confirmed by our US customers. We always recommend to set the pricing rule as VAT inclusive for the EU and UK .
Hi, I am interested if it is possible to have a VAT exempt app for B2B customers while still keeping the price including taxes and have the price same to all EU customers
HI ,
Unfrotuntely that is not possible directly in Shopify. You can try applications like Sufio , but it is still required that the customer pre register with you to be tax aexempt.
You’re asking whether showing VAT only at checkout might lead to abandoned carts — especially for European customers who expect to see the final price upfront. That’s a very valid concern.
One solution that worked well for us is the EU VAT Number Field Checkout app. https://apps.shopify.com/oo-vat-number-field-checkout?st_source=autocomplete&locale=nl
It allows you to collect VAT numbers during checkout and automatically validates them via the official EU VIES database. The app also checks whether the VAT number matches the customer’s billing country, ensuring proper B2B compliance.
This can now be handled with EUVAT.app — it validates VAT numbers via VIES, applies reverse-charge VAT automatically at checkout, and fully supports all Shopify customer account types and all EU store languages.
The app also stores VIES validation signatures for audit, flags risky or invalid VAT numbers, and ensures that the final decision on whether the VAT number belongs to the customer is always made by the store admin — providing full control and legal safety.
It is all good , but if you want to use any of these solutions in the actual checkout page, be prepared to pay top price for Shopify plus, otherwise it only works semi manually in the administrative side where you just make the customer non taxable ….. for which you actually do not need any apps and VIES is available for anyone online free of charge :
Which further only works when the customer EXISTS alredy, new customers can slip through.
And then there’s the issue of tax-inclusive
If you set a customer to be tax exempt but you use tax-included pricing, then the customer will still be charged the full listed product price. Tax Exemption Customers - Shopify manual
