It looks like I’ve found a way for customers to avoid paying VAT. Please let me know if this loophole is intended.
Shopify Tax Settings
- Don’t collect tax from non-EU countries, for example USA
- Select “Include Tax in Prices”
- Select “Include or exclude tax based on your customer’s country”
Create An Account with a US address
Create a normal customer account with an address based in the US. In this case, the price is 192.44 Euros (price without VAT) and shipping is 45 Euros (shipping from the EU to US).
Use Email associated with US account with an EU address
Switch the address above to an address in the EU. Everything else stays the same. In this case the price is still 192 Euros (price without VAT) and shipping is 4.90 Euros (shipping to EU). Here you can see that it’s possible to ship to the EU without paying the VAT.
Non-US account Email with EU shipping address
If the email is changed to one not associated with the US account, the VAT is included in the price. In this case, the price is 229 Euros (price with VAT) and shipping is 4.90 Euros (shipping to EU). This is expected behavior.
