Shopify adding tax at checkout, even though we "Include sales tax in product price and shipping"

Payments + Shipping & Fulfilment
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Topic summary

A UK-based Shopify store encountered an issue where 20% VAT was being added on top of product prices at checkout, despite having the “Include sales tax in product price and shipping rate” setting enabled. This occurred immediately after VAT registration.

Key details:

  • The store sells only within the UK and uses AirWallex as payment provider (not Shopify Payments)
  • Toggling the tax inclusion setting had no effect on the problem
  • Tax was being added before payment completion

Resolution:
The issue was resolved by adjusting settings under the Markets section in Shopify (not the general tax settings). The original poster shared screenshots showing the correct Markets configuration that fixed the double-taxation problem.

Another user confirmed experiencing the identical issue and found the solution helpful.

Summarized with AI on October 25. AI used: claude-sonnet-4-5-20250929.
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We just became registered for VAT yesterday and have provided our VAT registration number in Shopify.
We are a UK store selling only within UK.

However, I’ve found Shopify is adding 20% VAT on top of the product price at checkout, even though my store has always used the setting “Include sales tax in product price and shipping rate”.
In fact, I’ve tried turning that setting OFF and it makes no difference. 20% VAT is added at checkout no matter what.

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FYI, I am using AirWallex as my payment provider, not Shopify Payments. However, this incorrect tax is added at checkout, even before completing the purchase.

My settings are below. Is there anything I’ve missed???

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OK, I got this resolved with the help of Shopify support, thank goodness.

The incorrect setting was under Markets.

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Thanks for sharing. I was tearing my hair out with the same problem!

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