We sell two products in the UK, USA and EU. One is exempt from VAT. The second is not. How can I set up Shopify to collect VAT on the non-exempt item only in the UK and select EU countries?
Topic summary
Seller offers two products across the UK, USA, and EU; one is VAT-exempt, the other is taxable. Goal: charge VAT only on the non-exempt item in the UK and selected EU countries, not on the exempt product.
Shopify guidance: taxes are calculated automatically, but merchants can override rates for specific products and countries. Set up standard VAT for the non-exempt item following country-specific instructions.
For the VAT-exempt product, create a tax override set to 0% and apply it to the relevant countries. Tax overrides enable per-product, per-country control. VAT (Value Added Tax) applies in the UK/EU; the USA generally does not use VAT.
Resources: two help documents linked for setting up taxes and tax overrides; these guides are central to implementation.
Status: action steps provided; no confirmation of completion. Open questions may include selecting specific EU countries for the override scope.
Hi there, @keithscacao !
Thank you for your post, I’m happy to provide some information here.
Taxes are calculated automatically within Shopify, but you can override these tax rates for greater control over the taxes that you charge. In your case, you will want to set up taxes as normal for the non-exempt item (you can find instructions to do so as well as country-specific links in this help document). For the VAT-exempt product, you can create a tax override of 0% and apply it to that product in the applicable countries. Check out this help document for more information and the instructions for setting up a tax override.
Please let me know if you have any other questions!