How do I manage VAT/Tax settings for my articles on an e-commerce platform?

ArtaRoma
Visitor
3 0 0

Hello everyone!

i have a problem wit VAT/TAX all my articles are listed as tax included, how to manage those tax settings? when I put a certain selling price, do I have to calculate and add manually the VAT/TAX % on top or is that one automatically done by shopyfi?

 

Replies 3 (3)

Victor
Shopify Staff
2513 230 534

Hi @ArtaRoma,

 

Yes, this is all automated in the backend by Shopify. Our tax system will use information you have provided in your tax settings, such as your tax registrations and your locations, to charge sales tax at checkout when appropriate. That said, we would still encourage merchants to regularly check their orders to ensure that sales taxes are being applied as expected, and you can also manually set rates using tax overrides if need be.

 

Can you tell me more about where your business is based, and where you sell to?

Victor | Social Care @ Shopify 
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ArtaRoma
Visitor
3 0 0

Hello Victor, thanks for your reply. The business is located in Romania and we do sell worldwide. the problem is that all my articles are same price as before I did update VAT number. and is all "Tax included" I don't see anywhere the price difference based at 19% VAT we have in Romania....

Victor
Shopify Staff
2513 230 534

Hi @ArtaRoma,

 

When you select the "Include taxes in prices" option this does not automatically change the product prices, and instead includes the rate of tax in the product price you have listed.

 

I am not sure if you are selling in Romanian Leu or in Euros, but I will use Euros in this example. Let's say you have a product priced at €100, and you want taxes to be included in this price. If you enable this option in your tax settings the 19% tax rate is not added to the price (€100 x 1.19 = €119), and instead the €100 price is treated as the tax-inclusive price.

 

In this case the tax-exclusive price would be €84.03, as adding 19% of this figure gives us a final price of €100 (€84.03 x 1.19 = €100). The customer would therefore see a VAT charge of €15.97 at checkout while still paying €100.

 

If the prices you have listed are tax-exclusive, and you want to include tax in your prices, then you'll need to adjust your product prices accordingly. As you're selling internationally and from a country based in the European Union, you can also decide to include or exclude tax based on your customer's country.

 

I hope this explains things but please let me know if you have more

Victor | Social Care @ Shopify 
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