Hi,
I am a bit confused if the Isle of Man is considered part of the UK in sales, and I’m not sure how to process an order from the UK to there. According to Royal Mail, the Isle of Man is counted as part of the domestic UK, but it seems that the Shopify system does not recognise it as such. Since Shopify does not capture the VAT automatically, should I set it up myself?
Thank you for any help.
Kristal
HI Kristal ,
Shopify is not aware of many special situations in the EU and the UK .
Somehow they separated Aland islands into a “country” (which is correct from the taxation point of view) , but also they treat Monaco as a separate country, which is not from the
VAT point of view (it is France)
Isle of Man forms a single territory with the UK, and the VAT rules are broadly identical. This means that VAT is charged on supplies between Isle of Man and UK businesses as if they were domestic supplies.
So just enable IOM in your markets and set taxation to “yes” in the taxes and duties section. Treat supplies there as internal UK supplies.
Unfortunately this does not work. It simply marks the tax as “tax” and does not include it in any VAT totals, nor does it generate a VAT invoice. When Shopify then passes the sales data onto my accounting software it does so with £0 VAT.
HI HypnoticMonkey
Did you set up IOM as a separate tax entity in the taxes and duties settings?
Yes, I believe so. Is that correct?
Almost. My screen doesn’t say “Local taxes only apply to orders shipped
within the Isle of Man” but everything else is there. On an order from the
IoM, Shopify doesn’t generate a VAT invoice and labels the tax as “Taxes”
rather than “VAT” which means my accounting software doesn’t register it as
VAT.
You expect too much from shopify . They still think that Monaco is a separate country (it is certainly true in some minds , but it is not really true for fiscal purposes). I presume you use Shopify tax for making invoices?
