HOW TO SET UP TAXES IN YOUR SHOPIFY STORE

SET UP EU TAXES IN YOUR SHOPIFY STORE

INTRODUCTION

▸ This document will help you to configure taxes if your Shopify store is based in the European Union.

▸ The most important distinction when it comes to charging VAT in your store is whether your business is VAT-registered or not. This topic is covered in more detail in our Shopify VAT guide for selling to EU customers.

▸ If your business is VAT-registered and you want to sell to both consumers and business customers in different countries of the European Union, you will need to correctly set up your tax settings and tax rates.

SET UP EU TAXES IN YOUR SHOPIFY STORE

TAX SETTINGS

▸ In order to charge VAT to some customers and not to others, all product prices in your store should be set without VAT.

▸ Visit the Settings → Taxes page in the administration of your Shopify store and make sure that the All taxes are included in my product prices checkbox is unchecked.

▸ If you still prefer to show prices with taxes included to customers shopping in your store, please read the Show VAT prices on your product pages article from Shopify.

SET UP EU TAXES IN YOUR SHOPIFY STORE

TAX RATES

▸ Tax rates can be set on the Settings → Taxes page in the administration section of your Shopify store.

▸ If you do not see all EU countries in the Tax rates list, visit the Settings → Shipping page, click on the Add shipping zone link and type "Europe" in the search field. This will add all European countries to the list, but you might want to remove those which are not members of the European Union.

▸ You can then set the VAT rate for each EU country on the Taxes page. In most cases, you should use the VAT rate of your store's country for all countries of the European Union.

SET UP EU TAXES IN YOUR SHOPIFY STORE

TAX RATES

▸ However, if your annual sales to a certain EU country is more than its VAT threshold and your business had to register for a local VAT registration number, you should use the VAT rate of that country instead. You can read more about VAT thresholds in our VAT guide.

▸ For example, if your business is based in Germany, but you have had to also register for a local VAT registration number in France, your tax rates in Shopify might look as follows.

SET UP EU TAXES IN YOUR SHOPIFY STORE

The tax rates of a Shopify store based in Germany, that also has a local VAT number in France. The German VAT rate of 19% is set for all countries of the European Union besides France, which is set to the French VAT rate of 20%.

SET UP EU TAXES IN YOUR SHOPIFY STORE

IF YOUR SHOPIFY STORE SELLS TO BOTH CONSUMERS AND BUSINESS CUSTOMERS, YOU SHOULD MAKE SURE YOUR BUSINESS CUSTOMERS ARE SET AS VAT EXEMPT.

SUFIO.COM

SET UP EU TAXES IN YOUR SHOPIFY STORE

TEXT

Invoice with both the store's and customer's VAT numbers

Invoice with both the store's and customer's VAT numbers

SET UP EU TAXES IN YOUR SHOPIFY STORE

ABOUT THE AUTHOR

▸ Sufio is the first invoicing app for Shopify stores that allows to capture VAT numbers from business customers and automatically set them as tax exempt.

▸ See how Sufio can make your invoicing more intelligent.

‣ Visit http://sufio.com/