Shopify Tax

Shopify Tax is built right into your store's admin, making it easy to get started collecting VAT in the EU and UK. VAT is automatically collected when you have the relevant registrations in place.

It's your responsibility to decide where and when to collect VAT based on your business operations and local tax laws. You should also verify you're collecting at the appropriate tax rates, and are filing and remitting correctly.

No. You decide where and when to collect VAT. Shopify Tax calculates and collects VAT automatically at checkout based on your registrations.

Each region has its own rules for collecting VAT. You can use Shopify Tax's proactive liability insights to be notified when you need new VAT registrations as your business grows.

Shopify Tax stays up to date with changing tax regulations and monitors regulatory changes, VAT rate changes, and threshold changes proactively. This reduces the manual work required from you to stay compliant.

VAT is automatically adjusted based on your product categories, enabling you to confidently scale into new geographies and product lines without the need to know where certain products are and are not subject to VAT. Shopify Tax also automatically calculates the right shipping VAT by applying tax proportionally.

Shopify Tax is the most popular service for merchants because it offers the highest level of compliance with a minimal amount of upkeep. You can also choose to use an approved third-party tax service via the Tax Platform, or one of Shopify's legacy tax services. You have the ability to switch between tax services in the EU or UK independently.

Legacy services are free, but you're responsible to keep them up to date—or you risk exposing yourself to tax liability. As an example, you won't have access to automatic product-specific rates and exemptions, or proportional shipping taxes with Shopify Tax. You'll have to keep track of your liabilities, and rate or regulation changes on your own and make updates manually.Learn more about your options by visiting the Shopify Help Center or within the Taxes and duties section of your Shopify admin.

If you use Avalara, Vertex, or Drinks.com, the third-party tax service will manage tax calculation. Shopify Tax will be automatically deactivated and you will not pay for it.

Third-party services available on the Shopify App Store that manage registration and tax filing can integrate with Shopify Tax. Today, Shopify Tax provides you with liability insights, VAT calculations, collection, VAT invoicing, and reporting. You can use a third-party service available on the Shopify App Store to manage registration and filing. In the future, Shopify Tax may expand to offer these services.