How should VAT be handled for EU customers at checkout?

Shopify Partner
39 0 1

I have a swimwear company in the UK and we ship regularly to the EU. I am about to register for IOSS so we can collect VAT at checkout for customers in the EU. 

Previously customers have paid VAT on delivery - at their own expense.

However I am confused by how it works now we will collect it at checkout - should our prices include VAT or is it an extra cost? What do most stores do? And if it's best for the prices to include VAT meaning the total price will be the same as before does this mean we now have to cover the cost of VAT as we will have to pay to pay it back to the intermediary to file for us? My issue is that for the last year customers have been paying VAT but if we now collect it at checkout and include it in our prices we now have to absorb the cost of this and pay it back, like we do with the UK VAT.

It would be great if someone could clarify, I don't know if most stores who collect VAT at checkout are now absorbing the VAT cost themselves.

Many Thanks



Replies 2 (2)

39 0 32

I recommend checking out the SOVOS website for more comprehensive information on this. Each EU country has its own VAT so you need to factor this into your overall price. You will need to then pay a VAT return to each country.

You may need to use an Agent to help with this without registering for IOSS at a fixed price, the agent uses their own IOSS. I believe their is a company a lot of shopify users are using.

5 0 1

Hi Victoria,

Great questions!

If you still looking for a great solution for your issues, we are happy to help you out, and our solution is available at Shopify app store now.

To my experience, most stores show the final price included VAT, but we have clients show the price without VAT too. At the end, full price to be paid shows on the checkout page.


We have created a tool just for your needs. We register you for IOSS, calculate taxes and create IOSS reports and file them.

Book a meeting with us here (link: ) or check out EAS EU VAT automation (link: ) at Shopify App store


Kind regards!