Hi
I’ve been using Shopify for a few years but will be VAT registered from 1 March so need to make some changes to my store but I’m pretty confused about some aspects! I’ve entered my VAT number and in the settings it asks the following:
Decide how tax is charged
Manage how taxes are charged and shown in your store. For a summary of the taxes you’ve collected
** Include tax in prices
Product prices will include tax. Taxes on shipping rates will be included in the shipping price.
** Charge tax on shipping rates
Include shipping rates in the tax calculation. This is automatically calculated for Canada, European Union, and United States.
I assume I tick both of these boxes?
Also, I sell sell kids swimwear which although zero rated has to be included in my VAT return. I assume that I change my products to VATable but then put in a tax overide?
Hi Claire,
Configuration for the first item “Include tax in prices” depends on how your prices are set in the catalog, which in turn usually depends on your main market. If you ask about that , most probably, you are from outside of EU and UK (from US?) in this case you (again most probably) do not include the taxes in your catalog price but charge them on top of the catalog price. If this is the case, do not enable “Include tax in prices” - if enabled under this conditions (you being from US or other non-EU destination) the tax would be calculated within the catalog price and would reduce your mark-up.
Item 2. Since you are starting to collect taxes for UK you need also collect tax on shipment rate since shipment is part of the customs value of goods. So you need to set it on.
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