Hi,
We’ve been setting up a store where we’re selling eBooks based out of the UK. We have an OSS for handling EU VAT. Is there any guidance or best practice on how to handle product setup, collections, overrides and configuring of tax to ensure we’re seeing the varying tax rates in the EU and 0% in the UK. As after following the support documentation, we’re not seeing variable tax being applied when testing what a checkout for a user based in France looks like compared to Italy, UK and US.
International sales tax and EU that can be quite complicated, especially for digital products, it depends on the customer and the place of supply. What you might want to do is use a merchant of record like Lemon Squeezy. Essentially, what this does is it means they handle all their VAT and sales tax across the world and will put the right rates on it for you.
Hi @lbgda
First, you need to explicitly tell Shopify about all your tax registrations. Go to Settings > Taxes and duties. Here, you must add both your One-Stop Shop (OSS) registration for the “European Union” and your separate UK VAT registration for the “United Kingdom.” Without the OSS registration added, Shopify will not know to charge the variable EU VAT rates.
Second, for Shopify to automatically apply special rates (like the 0% VAT for eBooks in the UK), you must categorize your products. Go to each eBook’s product page, find the “Product category” field, and select the appropriate category, such as Books > E-Book. This tells Shopify’s tax engine to use the specific tax rules for that type of product.
After completing these two steps, you can test your setup by changing the customer’s country at checkout, and you should now see the tax rates update correctly for each location. Since tax rules can be complex, it’s always wise to confirm your setup with a tax professional.