Has anyone else experienced a change in tax being calculated on EU orders over 150 Euros.
We have a UK store and dispatch to EU regularly. We have an IOSS number and for orders under 150 Euros, tax is correctly calculated and collected at checkout. For order over 150 Euros, tax is not calculated or collected at checkout, as per EU regulations (instead customers pay this when the package arrives at customs in the EU country).
However, as of yesterday, Shopify is now calculating and adding tax to our EU orders over 150 Euros which it should not be doing. We have not changed any settings and I have even got Shopify to check our settings and they say everything is set up correctly, so why is this happening?
Does anyone else have any experience of this happening recently?
Since Shopify support confirmed your settings are fine, here are a few things to check:
IOSS Setup. Double-check that your IOSS number is correctly linked to your store and that the EU countries you ship to are set up properly for IOSS. Even small misconfigurations can cause issues.
Country-Specific Tax Settings. Make sure the tax settings for the EU countries youāre shipping to are correct. Sometimes, tax settings can differ between countries, even if theyāre all within the EU.
Tax Overrides. Look for any tax overrides or automatic tax rules that might have been set up for orders over 150 Euros. If unnecessary, disable them.
Test with a New Order. Try placing a new order over 150 Euros to see if the issue persists. This can help confirm whether itās a bug or a one-off issue.
Hi, thanks for your reply. Unfortunately, we have already checked all those issues and it is still happening. I have contacted Shopify for further support and will post back here if and when we get a resolution.
Hi, did you get a resolution to this issue? Is it possible it was a consequence of activating duty collection for the USA tariffs? Iām having this same issue with my UK VAT. With duty collection turned on to meet USA regulations, it messes with my UK VAT settings and does what youāre saying PLUS also adds duties to purchases over Ā£135. I donāt have any options for sending DDP to the UK so I canāt leave duty collection active for there. Iām struggling to find a solution to keep both USA duty collection and UK VAT collection active without also collecting UK duties I have no way to remit.
Hi, No, I havenāt had a resolution and I keep contacting Shopify and they say they have escalated it to their taxes department, but nothing yet. I think it may have something to do with activating duty collection for US orders, but at the same we also installed an app to get EU businesses to enter their VAT number so that they were not charged VAT (we are on Shopify basic). Initially Shopify said it was the app, but the developer gave us extremely comprehensive support and proved it wasnāt his app. Nonetheless, we have uninstalled his app to demonstrate to Shopify that it had nothing to do with the app, and we still have the problem.
May I ask how you are collecting the tax and duties for USA orders? I have disabled selling to the US market at the moment because I am trying to find a work around. Have you had to install an app that calculates the landed cost etc? Which shipping company do you use? Any advice would be much appreciated.
I will contact Shopify again today and see if I can get anywhere, but I am not very hopeful.
Hi again, I have just now completely turned off the āCollect duties and import taxes at checkoutā option (not just simply removed the market) and everything has gone back to how it should. I have tested several orders for both my UK customers and my EU customers (above and below the 150 Euro threshold), with and without VPNs, and everything is working as it should. Of course, this still means that we cannot sell to our USA customers as if I turn that setting back on, it will mess everything up again. I will update my support ticket with Shopify and let them know. Hopefully this will help you?
Hiya! After I replied to this thread yesterday, I did some checking in the settings and confirmed that too. I use a service for remitting my VAT and they have also confirmed that the problem is the shopify settings not being adapted to the current needs of stores. Shopify has said my ticket has been escalated to the tax department too, so hopefully they are working on it. We need to be able to leave on duties collection for USA but toggle OFF duties for UK and/or EU while continuing to collect VAT in the standard collection style for those regions. I have left USA duties on because my customer base there is larger, and Iāll have to deal with any UK orders I get that have issues- hopefully I just donāt get any til itās fixed
I replied to the newer comment but just responding here about the USA duties- Iāve left the standard shopify duty collection on. Itāll be easier to fix any UK orders I get than it would be to chase US orders for duties and Tariffs. I send with Australia Post so Iām using the zonos pre-pay set up- but in saying that, it only just became available on Monday so Iām yet to see how well it works. Everything Iāve shipped is still in processing stages.
Iām the other way, my EU customer base is larger so Iāll leave it turned off and my US customers will have to wait until it sorted. Thanks for taking the time to reply, its much appreciated and made me realise it wasnāt just something silly Iād done!
Hi, just stumbled across this thread and was about to say itās definitely because of the US tariff collection, but youāve worked it out already! Could you please update if Shopify Support has any solution for you? I have USA shipping turned off because like you my EU customer base is bigger.
Hi, So Iāve worked out what the problem is. When you set-up collecting taxes and duties, you only include USA. I had mistakenly added UK and EU, but this is already accounted for in the āTax Regionsā section. Now that I have removed UK and EU, everything is working fine. I have also started using Teleship to ship my US orders. I just installed this on Friday and had my 1st US order over the weekend, so can update the thread once it has reached the States. If you need, I can send you screenshots of the pages to help you with the settings.
Screenshots would be really helpful, thank you! So with your current settings, USA tariffs are calculated, EU taxes collected if theyāre within the 150EUR IOSS limit, and UK VAT is collected as normal? Thatās exactly the setup Iād like to get.
Then, scroll down to this section āDuties & Import Taxesā, and enable it/set-up so that you are only collecting for USA. Thatās it.
Now, everything should work. VAT charged in UK, tax only charged on EU orders under 150 Euros, and duties applied to US orders.
Make sure all your products have the tariff codes in them and correct country of origin.
Many of our products donāt incur duty (0%), but Royal Mail click and drop (when I tested it on a personal account) is adding tariffs that it shouldnāt. So, Iām hesitant to use my business click and drop account, because you never see the charges upfront, only when you are invoiced later.
Iāve made the decision to use a company called Teleship, which is pay as you go and everything was really easy to set up. They pay the duty if needed and you pay for it all at the point of buying the label. They provide a tracked 24 label to send your package to their hub and then it gets inserted into the US network. They handle all the customs.
Iāve just sent our first package, so weāll see how it works!
lastly, weāve also just installed an app to prevent EU businesses being charged VAT, so if you need the details of that, I can let you know.
Hi, sorry for the late reply, I mustāve missed the email notification. Thank you so much for these, Iām going to try them over the weekend. It seems like our product types should be okay with the Royal Mail calculations, but hopefully Teleship will be a good solution for you!
Can I just double check - currently for UK and EU you are using āShopify Taxā? Maybe thatās where I went wrong when I tried to get US tariff collection set up, Iām using āBasic Taxā which is free.
Orders <150 EUR , taxes are shown directly in checkout if a customer is from the EU
Orders >150 EUR , taxes are not shown directly in checkout if a customer is from the EU and price is shown without VAT
In both <150 EUR and >150 EUR cases, the dropdown for the country is an European country (Lets say The Netherlands)
In the case of >150 EUR, the customer gets an overlay from Shopify, warning that the price changed (as Shopify removed the VAT)
Then customer fills in his address, and then Shopify shows another overlay about price has changed, because the VAT is added back.
I also contacted Shopify Support, and also they escelated the problem
