Can I avoid double taxation on pre-charged international shipping and taxes?

Yann2021
Tourist
13 0 2

Hi.

 

I send internationally and would like to pre-charge customs/VAT for my customers. I will then use DHL Express with their DTP feature enable. I have seen a few solutions, like Zonos and Intuitive Shipping which allow me to collec the taxes upfront.

 

However, wouldn't DHL (/local tax authorities) charge me taxes on the taxes I collected ?

 

Say my item costs 1000 USD.

Shipping 100 USD.

And I ship to the UK, where the VAT rate is 20% (lets assume there is no customs charge on this item).

And UK VAT would be  = 1100 x 0.2 = 220 USD. So my app would add a "shipping and local taxes" cost of 220 on top of the standard shipping of 100 USD = 320 USD of shipping and taxes.

 

I only have the Basic plan with carrier services api enabled so the 320 USD would appear in the shipping box.

DHL will receive this, and eventually send me an invoice to pay tax on the total amount of 1320 USD. Is this correct to think like this ? In effect I would be paying tax, on tax. How do I avoid this ? Thx

Replies 4 (4)

D-blaqfolawe09
Explorer
65 5 12

Hello @Yann2021 

Nice to have you here

   Your request is more clear, thanks for the information.

    Fitinantely taxes can be collect before shipping your product and rate/value can also be added.

    

  1. From the Shopify admin, go to Settings > Taxes and duties.
  2. In the Countries/regions section, click your country or region.
  3. In the Sales tax section, click Collect sales tax.
  4. In Tax number, enter your tax number. If you have applied for a tax number, but don't have one yet, then leave this field blank. You can update it when you receive your number.
  5. Click Collect tax.
  6. Optional: To add more regions and account numbers, click Collect sales tax.

  NNo need of third party affairs, the setting can be don in your Shopify admin 

 

   If the suggestion is welcomed don't hesitate to LIKE and mark it as a SOLUTION.

 Of too have any other complain don't forget to keep the community informed.

 

Thanks.

banned
Yann2021
Tourist
13 0 2

Hey. Thanks for the response. I am based in Norway, and actually the currency I use is NOK. I see what you mean but I'm not sure it would be possible for me to apply for a tax number in all the countries I operate in . Add to that all the reporting which would be required in each legislation, which I want to avoid.

 

Ideally I would like to precharge taxes, but actually these are not taxes as such, but just an added cost to my items. And then use DDP delivery option (DHL Express DTP its called) where DHL do all the reporting, and just back charge me the taxes as a fee.

Aleksander2
New Member
4 0 0

Hi Yann, 

 

I am also located in Norway and looking into the same setup.

Did you find a good solution to collect taxes in Shopify and then ship from Norway as DTP/DDP?

 

Would love to speak to you about this.

Yann2021
Tourist
13 0 2

Hey Alex. Check your PM