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Default Cdn Taxes incorrect?by John - Member - 02:03AM, Jul 05, 2006 |
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Hi, I think the default implementation of tax rates for some Canadian provinces are incorrect. By default, I think Shopify should not charge provincial PST/HST for purchases outside of their home province, and not charge GST for international/US orders. That is, perhaps there could be an option where you state where your store is located, and it sets your default home province and federal taxes (for in-province purchases) and from there, when you add other countries, by default (or by option) select whether or not to charge taxes for out of province/country purchases. My reasoning is, AFAIK, if your store is one location, you don’t charge PST for out-of-province purchases. Since most Shopify stores are small-businesses, they most likely won’t have stores in several provinces, and thus, by default, they won’t be charging taxes out of province or out of country. So, the default settings should be no PST for out-of-province, and no GST for out of country. Right now, it’s a bit more manual work to have to set it up. (Or realize you are getting charges all sorts of taxes, like I did when I was testing my checkout). Perhaps there could be an option when setting up your store like: _ charge Province taxes to in-province purchases only _ charge Federal taxes to in-country purchases only Also, I noticed that the taxes are calculated based on your customers billing address, which doesn’t make sense. The taxes charged should be based on the store’s address, not the customers. In the meantime I’ll manually adjust the tax settings. With the AJAX interface, it’s pretty easy :) John. |
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As i wrote in the email to you. I think you are seeing this issue because you setup your shopify store during the early days of beta. Shopify has a pretty extensive database of default settings which are applied to new accounts. Unfortunatly existing customers sometimes have to deal with the old and wrong defaults. This is most commonly seen when prices show up with USD instead of the choosen currency. In these cases the proper money formatting hasn’t been set. This is party our fault, in the frantic days of the launch we didn’t write proper converters which applied the money formatting to all existing shops. Back to the taxes: We believe that taxes as they are applied to default stores are mostly correct. Please correct me if i’m wrong! ---
Tobias Lütke
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Almost all Canadian provinces mandate by law that if you sell goods to residents of that province, even if you are not based in the province, you must register for and charge them that province’s provincial tax. The few provinces that don’t make it mandatory strongly “recommend” it. That doesn’t mean that everyone does it. But it does make the Shopify team perfectly correct in their implementation. Taxes are calculated based on the customer’s location because that is the law.
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You can read all about this here.
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Another thought: If you changed it so that tax was calculated based on where the shop was located, you’d lose the ability (which you currently have) to NOT charge GST to international customers.
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Thanks for the link. Didn’t realize all those rules…too bad it wasn’t consistent across the board…
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No problem. I totally agree, it’s an absolute nightmare.
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tobi
Shopify
03:58AM, Jul 05, 2006