Thanks you so much for posting this tresure trove of information. From my encounters with european taxation laws i know how scattered and sparse these information are sawed. Thanks again for assembling this resource.

I’ll definitely address the current issue in the future.

Hi Tobi & crew,

Medium-level urgency:

I don’t know whether anyone’s been looking at the tax issue recently, but it doesn’t seem to have changed much; which means I will only be able to sell to EU countries, nowhere else, not even Switzerland, which I would like to have on my list.

Say I have an item that I’m selling for € 8.36. The French VAT, applicable to all EU sales is 19.6%, which makes € 10.00. This is the default price that I indicate in my store.

Swiss customers (and Canadian & everyone non-EU) should only pay € 8.36, since their own taxes will be collected by the postal authorities (in most cases). But the checkout still charges € 10.00. Which means they would be doubly taxed, and I’d be grossly overcharging them, & illegally pocketing EU taxes.

I just ran a test, and it it still seems impossible to get this right. It’s not of immediate urgency; for the time being I’m happy to restrict my sales to the EU, but I would like this not to disappear off the radar screen altogether, and to be able to sell to Switzerland, and perhaps farther afield in a not too distant future.

Its unfortunately one of those things which looks simple from the outside but has a lot of implications on the code. It would be difficult to implement at this point of time because we are all invested in bigger, shopify related, sub projects. Taxation changes would actually be one of those sub projects into itself.

I hope its OK for now if you restrict your sales to the EU countries. We will revisit taxes but it won’t be anytime soon which christmas business coming up.

If it’s absolutely mandatory to show prices inclusive of tax, then this may discourage buyers who don’t know that they don’t have to pay tax until they checkout.

One workaround would be to hardcode some Javascript inside each page that shows prices. The Javascript would take the price from the store (in Christina’s example, 8.36) and add the tax before displaying it as 10.00. It could even be used to show both pre-tax and post-tax prices. Then when proceeding through the checkout, Shopify’s tax lookup takes over and adds the tax properly to 8.36.

Another typical solution that other carts use is to assume a visitor is from a particular country, and use that setting for shipping and tax calculations until the actual shipping destination is chosen during checkout.

well, actually, it doesn’t even look that simple from the outside…:).

I’m fine with just EU sales for now; hoping you’ll get some time for this sub-project at one stage in the future; – you’ll just have to resist the temptation to order from my store until then :).

Boxhead – our messages crossed. In Europe, it is actually mandatory to show prices including tax – people would be very much taken aback to find out they had to pay more than the price listed, which would lead to zero customers for me, & possibly legal hassles. I’m thinking that most of my customers would be from France anyway, given the language.

As to your javascript solution – sounds a bit risky; I’d rather have all the financial stuff done server-side.

further discussion on this topic here:

http://forums.shopify.com/categories/1/posts/4445#comment

Christina,

Firstly, a personal thank you for your contributions. You’ve saved a lot of people a lot of time with this and your other EU Tax thread. You’ve helped me especially.

After reading all of your posts, I had a thought that might help some people with the EU tax problems but may also some significant drawbacks for others:

Create a parallel store for non EU sales. VAT free, different terms and conditions, different shipping rates, etc. This may work for us as we have a limited range of items thus the inconvenience of creating two sites and maintaining two inventories may well be worth it. You/we might even be able to persuade Tobi and the Shopify team to duplicate a site to avoid the initial set-up effort.

I’m new to this so go easy with me if this is the stupidest idea ever posted.

Matt

Matt – my pleasure! I’m glad it’s of use.

& if setting up a second store is the stupidest idea, well I think there’s quite a number of us being stupid & setting up duplicate stores for various reasons, mostly to have different language versions. In fact, I was just coming here for a little break from uploading all my product pictures for the second time, for store no.2 – phew! & we all hope & believe it’s temporary & that one day, there’ll be internationalization and tax rate tables etc etc, which will make all the parallel stores redundant. (& take a bit of a load off the shopify database!)

But in the mean time, I think that might actually be a pretty good workaround for the tax issue in your case. Might actually make the accounting pretty easy.

Being able to duplicate automatically would be fantastic though…

hello,
I’ve tried this awful hardcoded hack to SOLVE THE EUROPEAN vs WORLDWIDE VAT issue. it works for me.

basically if you are an european merchant (like me) you need to display
- prices without VAT for all customers of the world
- prices with VAT only for EU customers.
I chose to show by default a price that is WITHOUT VAT for all my world customers and ADD TO THAT a string of text that warns european users of their price with VAT added
something like:
product name for 100.00 EUR (+20%VAT only EU-users = 120.00 EUR)

you need to do the following things:

1- go to your admin panel Preferences > region & taxes
and DESELECT the option “All taxes are included in my product’s prices”
this will make all prices without your local VAT included.
We do this basically because the majority of countries won’t have to pay VAT taxes

2- go to admin panel > look&feel > Assets > shop.jp and edit it.
add the following function at the end
and modify the VAT_perc variable to suit your own vat percentage

//function to adjusts EU prices with VAT
function adjustVAT (price) {
     //change VATperc to your national Vat percentage
     //ie: italy is 20% of VAT so I put 20
     var VATperc = 20;
     var addVat = 1+(VATperc/100)
     var price_with_VAT = price*addVat;
     document.write(price_with_VAT); 
}

3- go to all pages that exhibit a price and add the following code in the appropriate spot
I’ve done it only in the “product.liquid” template but probably it can be done in every place

(+20%VAT only EU users = 
<span class="price">
  <script type="text/javascript">
    adjustVAT({{ variant.price | money_without_currency }});
  </script> {{ shop.currency }}
</span> )

You can change the first line of text as you will

4- chech one of your products pages in your site and be sure to adapt the layout because this will make your price text longer

- further development:
I tried to pass the {{ shop.currency }} to the javascript function as another parameter but I didn’t succeded, does anybody know why this happens?

- furter development 2:
do you think that is possible to create a script that parses the whole text and changes the price?
What about tracing where the user is located and apply custom taxes only based on location?

well this is a work in progress..
feedback is appreciated :)
ciao
b.

— Last edited 05:25PM, Dec 13, 2006

Hi all.

One thing is missing from this thread. Countries that have different VAT percentages for different type of products. I know this is not in direct relations to EU / non EU sales, but it illustrates how sales within the same country have to calculate different VAT percentages on different products.

Example 1 – Iceland:
Books and literature carries 7% VAT
Food carries 7% VAT
Clothes carry 24.5% VAT

Here’s where things get complicated. Some food supplements carry 7% VAT while other carry 24.5% VAT. (This is what I’m dealing with right now, since I’m opening a store selling supplements).

Example 2 – Sweden:
I don’t remember the exact categorization, but in Sweden has three VAT percentages, 7%, 14% and 25%.

In my opinion this needs to be addressed in Shopify and probably the only way to do it properly is to allow the store owner to select the appropriate VAT when creating / editing the product.

Best regards,
Kjartan S.

the thread you are looking for is here

glad to see someone agrees with me on this.

Oh this little issue just bit our store a day before launch! It is a big show stopper.

Our only current choice is for non EU customers to stomach the extra cost.

I thought a workaround would be setting up the EU countries to have tax included, and 0% tax set, and then the rest of the world would have -17.5% tax. Although the prices are shown inclusive of VAT, at least they wouldn’t be shown it. But Shopify can’t deduct negative tax rates.

Ouch.

We want to sell internationally too at wornagain.co.uk.

We’re displaying the cost of our goods with 17.5% VAT added.

From what I can tell, orders outside of the EU should have 17.5 taken off the final price, so a GBP 40.00 item should be available for around GBP 34.04 on the checkout display.

No amount of fiddling with options, on the backend in the admin section, or from the customer’s end will revise the figure downwards, which makes us far more expensive than we want to be.

What am I doing wrong here?

Is there much of a time delay here I should expect before seeing prices change?

I have a business in France. I am not registered for French VAT. A UK supplier told me that I have to pay UK vat on their goods because of not being registered in France. If I were registered I could have the goods free of UK vat but would have to pay French vat on receipt of the goods. That’s clear enough.

Here’s a new one. I’ve recently been supplied with goods from a company who may be based in the EU or may be based in India (I’ve asked for clarification about this). The carrier that delivered the goods about three weeks ago has just sent me an invoice for French vat(tva) of 19.6% of the value of the goods. I have queried it with the supplier. Their response is that, as far as they are aware, all goods coming into France have to have French vat (19.6%) paid on them.

I also receive goods from outside the EU. To date no tax of any kind has been charged on these.

Has anyone any comments?

— Last edited 05:08PM, Feb 11, 2009

Has there been a solution to this issue? Just checking in as I’m new to Shopify

Thanks