Contents
Terms Used
Assumptions
Understanding VAT
VAT & Shopify - In Theory
Selling from IE to IE
Selling from IE to EU (including NI)
Selling from IE to GB
Selling from IE to ROW
VAT Rates Quick Reference
Understanding VAT on Shipping
VAT & Shopify – In Practice
General VAT Configuration in Shopify (includes IE to IE)
VAT Invoice Configuration in Shopify
Configuring Shopify for Selling from IE to EU (including NI)
Configuring Shopify for Selling from IE to GB
Configuring Shopify for Selling from IE to ROW
Configure Non Standard VAT Rates in Shopify
Configure Shopify Products to Make Sure VAT Works Properly
How to Not Charge VAT to B2B Customers
Working with Perfidious Albert on Shopify VAT Configuration
This article represents significant research. Please respect this effort by linking to the original source if you reference this content. If you spot any issues or have any doubts please contact us.
Author: Ruairi Browne of Perfidious Albert
Tax Advisor: Ralph Smith of Do My Books
Terms Used
| Term | Definition |
|---|---|
| VAT | Value Added Tax |
| B2C | Business to Consumer (selling to consumers) |
| B2B | Business to Business (selling to other businesses) |
| Revenue | The Irish Revenue Commissioners |
| HMRC | His Majesty’s Revenue & Customs (UK Revenue) |
| IE | The Irish State (the part of the island in which The Irish Revenue Commissioners have jurisdiction) |
| NI | Northern Ireland (the part of the island in which HMRC have jurisdiction) |
| GB | Great Britain (Scotland, England, and Wales) |
| UK | The United Kingdom (NI & GB). Excludes IOM & Channel Islands |
| EU | The European Union (the rules for the EU also apply to NI and probably apply to EEA member states as well as Switzerland - check with a tax expert) |
| ROW | The Rest of the World |
| SME | Small or Medium Enterprise (a business small enough to be reading this instead leaving it all to their in-house accountants and tax advisers) |
Assumptions
In this article we assume you are an VAT registered SME limited company based in IE and that you do not have a branch or fulfilment location outside of IE. We don’t think the rules differ for a VAT registered sole trader, but please check all our advice with your tax adviser.
Perfidious Albert are not accountants or tax advisers, we are just trying to help small businesses understand and navigate a complicated topic that affects all e-commerce retailers, even more so since Brexit.
Out of necessity we simplified the explanation of VAT. There may be non VAT registered businesses in the supply chain, there could be foreign suppliers etc, but you will hopefully understand the concept.
Understanding Value Added Tax
VAT or value added tax is a tax on value added, hence the name. What does that mean? It’s an ingenious tax system, but it’s not straightforward.
The value added part means that at each stage of the supply chain from raw material to production to wholesale to retail value is added to a product (or service, but we will stick to products). VAT is a tax on that value. Each business in the supply chain can reclaim the VAT they paid on the incoming material or product, so this means the tax part of VAT is only applied to the gross margin or the value that business added.
What’s very important to remember is that VAT is a consumption tax. It only finds its final value when the product is finally consumed or sold to a consumer (as opposed to a business).
VAT is different to the sales tax used in the United States – US sales tax is only applied at the final point of sales. I will explain the advantage of VAT over sales tax in this regard later.
An example will make it all clear. In the following scenario for simplicity we will assume everyone is VAT registered, and we will assume for easy maths that the VAT rate is 20%.
Value Add Number 1 - The Forestry Company
A forestry company has grown a tree. Let us assume the tree was grown from seed and had no monetary value when it was planted.
They sell the tree to the lumber company and send invoice number FOR001 to the lumber company for €100 + VAT. When they receive the €120 they send €20 to Revenue as part of their VAT return.
The value added by the forestry company was €100 so the value added tax at 20% is €20. But we will see that as the value increases along the supply chain the value added tax increases.
Value Add Number 2 - The Lumber Company
The lumber company receive invoice FOR001 for €100 + VAT. After they pay the €120 they claim €20 back from Revenue as part of their VAT return.
The lumber company cuts the tree into planks. They sell the planks to the picture frame company and send invoice number LUM001 to the picture frame company for €200 + VAT. When they receive the €240 they send €40 to Revenue as part of their VAT return.
Value Add Number 3 - The Picture Frame Company
The picture frame company receive invoice LUM001 for €200 + VAT. After they pay the €240 they claim €40 back from Revenue as part of their VAT return.
The picture frame company processes the lumber into 100 fancy picture frames. They sell the picture frames to Harvey Norman and send invoice number FRA001 to Harvey Norman for €500 + VAT. When they receive the €600 they send €100 to Revenue as part of their VAT return.
Value Add Number 4 - Harvey Norman
Harvey Norman receive invoice FRA001 for €500 + VAT. After they pay the €600 they claim €100 back from Revenue as part of their VAT return.
Harvey Norman places the 100 fancy picture frames onto the shelves of their flagship store. For simplicity let’s pretend they get lucky and sell the 100 picture frames to Mary Murphy who has a very big wall in her house. They invoice Mary Murphy €1,000 + VAT, and she pays that €1,200 straight away on her debit card. Harvey Norman now sends €200 VAT to Revenue.
Final Value - The Consumer - Mary Murphy
Mary Murphy is a consumer and is not VAT registered. She has paid the VAT but she cannot reclaim it. The value of the tree/lumber/frames when she pays is €1,000 so she gets stuck for the full value added tax of €200.
It is a powerful tax and a very sensible one. If there was a general sales tax on every sale made, even for businesses, then the cost of the frames would be enormous as the tax would pile up on the tax. Instead, the tax is only on the value added by each company in the chain from raw material to consumer, and each company can reclaim it if they add more value and sell it on. The value is only found when the product is finally consumed so the value added tax is only paid when the product is finally consumed.
You might ask why the tax is not just added at the final retail stage like in the US. The reason for that is simple – the only person that can be reasonably expected to decide who is the final consumer is the final consumer themselves. Let’s say Mary was an artist and was going to use the frames to frame her paintings and sell them in her studio. What’s just happened is that the frames have no longer found their final value – they still have another step to go before they reach the final consumer. Now how could Harvey Norman be expected to know that? It’s a brilliant system – the value added tax finds the value by finding the final purchaser in the chain who is not VAT registered and can’t make a claim to get the VAT back.
There is a flaw – let’s say Mary is an artist who owns a studio, but she wants the frames to decorate her own home. Hmmm. Well then, she could easily make a VAT claim and pretend the frames were a business expense. But that would be illegal of course.
VAT & Shopify - In Theory
In Shopify we need to handle VAT if we are VAT registered. We have lots of things to consider. I mean lots. It’s complicated. For starters most countries have one main tax rate (in the UK its 20%) and most Shopify stores in the UK probably sell all products at 20% VAT. 20% is also a nice round number and easy to work with.
Ireland has 5 VAT rates and the top or standard one is 23%. Unlike in the UK there is a lot of products and services at the lower VAT rates, so it is not that unusual to find Irish Shopify stores selling different products at different VAT rates. You should also note that a 0% VAT rated product is not the same as product with no VAT.
A product that is VAT exempt does not have to be declared on your VAT return and does not count towards your VAT thresholds.
The main difference between zero-rated and VAT-exempt services is down to reporting and whether or not your business can reclaim VAT. If your business supplies zero-rated goods or services (or goods or services subject to one of the other Irish VAT rates), you must report them on your VAT return, and you can claim VAT back on your business-related purchases. If you only supply goods or services that are VAT-exempt, you can’t claim VAT back.
Examples of services that are exempt from VAT include live music performances, educational services, financial services, and medical services. We can't find any VAT exempt products.
A product that is liable to 0% VAT does have to be declared on your VAT return and does count towards your VAT thresholds. In Ireland this would include many food items, medicines, childrens clothing, etc.
Shopify tends to categorise products as taxed or untaxed, later in this article we will explain how to add an additional reduced rate of VAT in Shopify. If you want to be entirely accurate you should really set-up 0% as a reduced VAT rate and treat it differently to Shopify's non-taxable product setting.
IE -> IE | Selling from Ireland to Ireland
In these scenarios your business is VAT registered in Ireland and your order is being shipped to an address in Ireland (or collected at your address).
Scenario 1 – Selling to Irish Consumers (B2C)
Remember that it is not for us to decide who is a consumer. You legally must provide a VAT receipt to another accountable person (i.e. someone registered for VAT) and in certain other situations.
If you sell a product range that is obviously a consumer product like customised birthday cakes and you only sell individual items at full retail price (in other words no trade sales), then you can likely safely assume that every buyer on your website is a consumer. If this is the case, then you can simply set your VAT rates for accurate reporting and get on with your business.
Scenario 2 – Selling to Irish Consumers and Businesses (B2C & B2B)
If you sell a product range that could be reasonably purchased by a consumer or a business, such as stationary then you might want to turn on the sending of VAT invoices by default. This will save you handling requests from companies looking for a VAT receipt.
Scenario 3 – Selling Exclusively to Irish Businesses (B2B only)
If you sell a product range that is B2B (business to business) like medical supplies or shop fitting equipment then you may choose to show the price excluding VAT on your website, and you should send a VAT receipt with every order. Remember though, you must still charge VAT.
Selling from Ireland to European Union (Including Northern Ireland)
Irish businesses moving and supplying goods to Northern Ireland and the EU are required to report details of trade with Northern Ireland and the EU on Intrastat returns (subject to the threshold limits) and VAT Information Exchange System (VIES) returns. The Irish Revenue Commissioners have provided further information on the completion of VIES and Intrastat returns.
Scenario 4 – Selling to EU Consumers (B2C)
Every year you can sell up to €10,000 in products to the EU (outside Ireland) without worrying about VAT rates. Simply charge the VAT rate you would to an Irish consumer. This is not per country; it is across the EU, so be aware that €10,000 of sales to Northern Ireland will put you over the threshold.
Northern Ireland operates under special provisions following the Ireland/Northern Ireland Protocol, and for the purposes of an Irish registered business handling VAT in Shopify, it is effectively treated as part of the EU VAT area.
Once you reach the threshold of €10,000 in sales you then must register for VAT in every EU country that goods are supplied to or register for the EU VAT scheme named One Stop Shop (OSS).
The OSS scheme simplifies VAT obligations for businesses selling goods and services cross-border to final consumers in the EU. Once registered for the "Union scheme" (OSS for EU registered businesses), a taxable person or company can declare and pay EU VAT due on supplies made under the scheme in a single electronic quarterly return and communicate with [Irish] Revenue in relation to these returns, even where the sales are taxable in another Member State.
Where a business registers for the Union scheme, it must declare, and pay, all EU VAT due on all supplies covered by the Union scheme.
Suppliers established in Ireland can register for the Union scheme electronically. This can be done through the VAT OSS section in Revenue Online Services (ROS).
Scenario 4A - You are Under the 10k Threshold and Not Registered for OSS
Simply charge the Irish VAT rate as you would to an Irish consumer. Shopify will handle this for you if you set it up properly. It will even alert you when you reach the threshold.
Scenario 4B – You are Registered for OSS
Simply charge the VAT rate that would apply to the sale if the consumer purchased this product in their own country. Shopify will handle this for you if you set it up properly.
Scenario 4C – You are Registered for VAT in EU Countries
Simply charge the VAT rate that would apply to the sale if the consumer purchased this product in their own country. Shopify will handle this for you if you set it up properly, but it is set-up differently to scenario 4B.
Scenario 5 – Selling to EU Businesses (B2B only)
When selling to another VAT registered business in another EU country you should probably not charge VAT at all unless you are VAT registered in that country (discuss this with your tax advisor). This is called a reverse charge and in effect it moves the obligation for accounting for the VAT from the seller to the buyer. You will know the business is VAT registered as they will supply a VAT number and you will validate it.
You are under no obligation to remove VAT for business customers in the EU, but if they are an important part of your customer base then you should because otherwise they simply will not purchase from you.
The problem is Shopify does not handle this well (although at the time of writing in Jan 2026 it looks like they are starting to implement better handling for this scenario). You will probably need a third-party app and the one we have used previously is called Sufio.
Selling from Ireland to Great Britain
Selling from the EU to Great Britain is a lot harder since Brexit and much more complicated than selling into the EU.
Scenario 6 – Selling to GB Consumers (B2C)
- All Irish retailers exporting to GB are required to apply for a GB EORI number online
- All Irish retailers exporting to GB are required to register with HMRC and pay taxes in the UK (unless all of your orders are over £135)
- All Irish retailers exporting to GB will need to complete a customs declaration form – CN23
- You will need to know the Harmonized System (HS) code aka TARIC Code aka Commodity code for every product in your Shopify store
Scenario 6A - Consignments valued at less than £135
HMRC states that goods with a value of GBP£135 or less that are sold to customers in England, Scotland, or Wales will have UK supply VAT charged at the point of sale. In other words, charge GB customers GB VAT rates.
- The £135 applies to the whole order – not the individual goods in the order. So, 4 products for £50 each in one order is over the limit.
- The £135 does not apply to “ excise goods” which includes alcohol.
- The current guidance is that the £135 threshold is based on the intrinsic value of the goods, excluding transport, insurance costs, and taxes, unless these are included in the price and not separately indicated on the invoice.
- Gifts are exempt.
This all means that Irish traders selling B2C to GB will have to register for UK VAT if selling goods valued at less than £135.
Scenario 6B - Consignments valued at more than £135
This scenario also applies to excise goods regardless of the value.
If the intrinsic value of your shipments is GBP 135 or more, you can decide whether you or your customer is the importer of record. Making your customer the importer of record means they’re responsible for any duties or import VAT due on the shipment and you don’t have to register for anything.
If you are not HMRC VAT registered you can zero rate the sale (don’t charge any VAT). The customer will pay the VAT and duty upon delivery (from 2029 it is planned that duty will also be payable on orders valued at under £135).
Alternatively, if you are registered for VAT with HMRC, you can choose to add the VAT and make a UK VAT return, but the customer still pays duty if due. There is a way in Shopify to pay the VAT and duty on the customers behalf (known as a delivery duty paid solution), so that they get the final price at checkout. That is for another article.
If you sell regularly to GB consumers then you should do everything in your power to ensure they receive their orders with VAT and duty already paid. It's good business sense.
Scenario 7 – Selling to GB VAT Registered Businesses (B2B)
Scenario 7A - Consignments valued at less than £135
When you sell goods to businesses in the UK, you can opt to make them the importer of record as long as the intrinsic value of the shipment is GBP 135 or less. They can pay the import VAT up front or account for it on their VAT return (if they’re registered for Postponed VAT Accounting). Just make sure the invoice is correct, and includes your customer’s HMRC VAT number.
Scenario 7B - Consignments valued at more than £135
You’ll need to register for VAT with HMRC if the intrinsic value of the shipment is greater than GBP 135. If your customer has a VAT number, you don’t have to charge them VAT, but you will need to report the sale on your HMRC VAT return as a zero-rated supply.
Selling from Ireland to the World
Scenario 8 – Selling to Anyone who is Anywhere Outside EU/UK
Selling outside of the UK and EU is simple – just remove the VAT and follow your shipping/courier company guidelines for filling out customs declarations forms and supplying Harmonized System (HS) codes. You do not need to distinguish between B2B and B2C customers.
VAT Rates Quick Reference
| Ship To | Sales Type | Order Value | OSS Status | VAT | Scenario |
|---|---|---|---|---|---|
| IE | B2C | IE | 1 or 2 | ||
| IE | B2B | IE | 2 or 3 | ||
| EU/NI | B2C | < €10k per annum | IE | 4A | |
| EU/NI | B2C | OSS Registered | EU1 | 4B | |
| EU/NI | B2C | EU Registered2 | EU1 | 4C | |
| EU/NI | B2B | 0%3 | 5 | ||
| GB | B2C | < £135 | GB4 | 6A | |
| GB | B2C | > £135 | 0%5 | 6B | |
| GB | B2C | Excise Goods > £0 | 0% | 6B | |
| GB | B2B | < £135 | 0%5 | 7A | |
| GB | B2B | > £135 | 0%5 | 7B | |
| GB | B2C | Excise Goods > £0 | 0%5 | 7B | |
| ROW | B2B/B2C | 0% | 8 |
1 Apply the appropriate VAT rate of the shipping country for that product.
2 You are registered for VAT in the shipping country for that order.
3 0% VAT is not the same as no VAT.
4 You are obliged to register for VAT with HMRC.
5 Or if you are GB VAT Registered you can choose to charge VAT. See scenario text.
Understanding VAT on Shipping
Shopify follows the Revenue guidelines on shipping VAT rates for e-commerce. By now you probably realise they won’t be straightforward, and unfortunately in my opinion Shopify doesn’t handle them so well.
If you charge 23% VAT on every product in the order then your shipping rate that you set for the customer is assumed by Shopify to include 23% VAT.
If you charge 13.5% VAT on the full order then your shipping will be rated at 13.5% VAT.
If you charge 0% VAT or no VAT (not the same) on the full order then your shipping will be rated at 0% VAT.
If you have a mixture of products at different VAT rates then your shipping will have a mixture of different VAT rates to the same ratio. This can a nightmare for reporting and accounting. It means when you run a report showing VAT in Shopify the VAT rate for shipping can be anywhere from 0% to 23% or anything in between (like 8.672%) making it very hard to automate a VAT report with VAT broken into the different rates.
It is important to note that Shopify [almost always] works in Gross prices for products and shipping. This means that if a product you sell is €100 plus VAT @ 23% then you should enter it into Shopify with a price of €123 (Shopify will work out the final price for other countries). Likewise, if your shipping is €10 + VAT @ 23% you should enter it as €12.30. However, note that if you sell a 0% product and ship it the customer will still pay €12.30 but the shipping price will be €12.30 + VAT @ 0%. This is not the case for a product where the price the customer pays will go up or down if the VAT rate changes.
You can override this behaviour and force all shipping to have a fixed VAT rate if you so wish.
VAT & Shopify – In Practice
Configuring Shopify for VAT
In this section we will configure your store to collect VAT. Follow this guide and when you are finished your store will be configured correctly. You can refer to the VAT Rates Quick Reference table if you need to understand which scenario this guide is referencing at various points.
Step 1 – Configure Shopify for VAT - General Settings
The following instructions apply to all scenarios.
- Navigate to https://admin.shopify.com/store/YOUR-STORE/settings/taxes
- Scroll down the page to Tax regions and click on the European Union region.
- You should now be at https://admin.shopify.com/store/YOUR-STORE/settings/taxes/EU
The top box is Tax service. Ensure Shopify tax services is active. This article assumes you are using Shopify tax services and our advice is to use it. It helps with all matters pertaining to VAT. There are fees when your store sells over €100k per annum, but they are modest compared to the hassle it saves.
The next box is Collect VAT in an EU country. If your store is correctly set-up for Ireland then the only country shown here is probably Ireland. If you have turnover of less than €85,000 Shopify may advise you that you are Below threshold. This means you do not have to register for VAT, however, remember it only knows about your Shopify turnover and there are sometimes reasons to register for VAT even under the threshold. Ask your tax advisor.
- If you are VAT registered, then click on the Collect Vat button.
- Enter your Registration country as Ireland and enter your full VAT number including the leading IE.
- Click the Collect VAT button to save your details.
Step 2 – Configure Your VAT Invoice Settings
The following instructions apply to all scenarios.
You should still be at https://admin.shopify.com/store/YOUR-STORE/settings/taxes/EU
- Scroll down to VAT invoices.
- Click on Generate and display invoices when orders are placed.
- If you wish to do so Add a Custom logo
- Click Save at the top of the page
You are now set-up for selling from IE to IE (Scenarios 1, 2, & 3). If you do not sell abroad you can skip to Step 6.
Displaying Ex-VAT Prices
If you are a purely B2B business and you want to set-up Shopify to display "ex-VAT" prices then navigate to
Settings > Taxes and duties, uncheck Include tax in prices, and ensure your base product
prices are set without VAT (e.g. list €100.00 for a £123.00 item) so Shopify adds it at checkout; for dual displays (inc/exc VAT), you'll need a Shopify app like Taxify or custom code.
Step 3 – Configure Your EU/NI VAT Settings
The following instructions apply to Scenario 4 (at this stage you do not need to do anything for Scenario 5)
You should still be at https://admin.shopify.com/store/YOUR-STORE/settings/taxes/EU
The following instructions apply to Scenario 4A
If your annual sales to other EU countries including Northern Ireland are or will be less then €10,000 then do the following.
- Scroll to Collect VAT cross-border
- Click the Collect VAT button
- Select Collect using your home country registration
- Enter Ireland as Country of registration and your VAT number starting with IE
- Click the Collect VAT button
The following instructions apply to Scenario 4B
If your annual sales to other EU countries including Northern Ireland are or will be more then €10,000 and you are registered for One Stop Shop (OSS) then do the following.
- Scroll to Collect VAT cross-border
- Click the Collect VAT button
- Select Collect using a One Stop Shop (OSS) registration
- Enter Ireland as Country of registration and your VAT number starting with IE
- Click the Collect VAT button
The following instructions apply to Scenario 4C
If your annual sales to other EU countries including Northern Ireland are or will be more then €10,000 and you are not registered for One Stop Shop (OSS) then you will need to be registered for VAT in each country you sell to.
- Scroll to Collect VAT in an EU country
- Click on Collect in another location
- Enter the Registration country and your VAT number in that country
- Click Collect VAT
- If you're registered to collect VAT in additional countries, then click Collect in another location to add additional VAT numbers.
You are now set-up for selling from IE to EU (Scenario 4A, 4B, 4C, & 5). If you do not sell anywhere else you can skip to Step 6.
Step 4 – Configure Your GB VAT Settings
The following instructions apply to Scenario 6 (at this stage you do not need to do anything for Scenario 7)
- Navigate to https://admin.shopify.com/store/YOUR-STORE/settings/taxes
- Scroll down the page to Tax regions and click on the United Kingdom region.
- You should now be at https://admin.shopify.com/store/YOUR-STORE/settings/taxes/GB
- The top box is Tax service. Ensure Shopify tax services is active. This article assumes you are using Shopify tax services and our advice is to use it. It helps with all matters pertaining to VAT. There are fees when your store sells over €100k per annum, but they are modest compared to the hassle it saves.
- Under Collect VAT it says Collect VAT on orders under £135 shipped to the UK. Click on the Collect VAT button.
- Enter United Kingdom as Country of registration (you should be forced to do this) and your VAT number starting with GB
- Under VAT invoices click on Generate and display invoices when orders are placed
- If you wish to do so Add a Custom logo
- Click Save at the top of the page.
You are now set-up for selling from IE to GB (Scenario 6A, 6B, 7A, & 7B).
Step 5 – Configure Your ROW VAT Settings
You do not normally need to do anything for the rest of the world. Shopify will handle it. There may be situations where if you ship a lot to certain countries you will need to register for their local tax (in the same way as the UK expects the whole world to register with HMRC), but that’s not for this article.
Step 6 – Configure Your Non-Standard VAT Rates
If all your products are 0% VAT, No VAT, or 23% VAT then there is no need to do anything for Step 6. If you have reduced rate VAT products follow these steps. Your products may also attract a non-standard VAT rate in the UK or EU and the process is the same, however Shopify seems to handle those scenarios for most other countries pretty well by itself so maybe see how it works first.
Repeat A and B for each VAT rate.
A- Facilitate VAT Rates by Creating Collection
- Navigate to Products -> Collections and click Add collection
- The Title of the new collection is something like Reduced Rate VAT XX%
- Click Manage under Publishing and click Deselect all
- Press Save
B - Continue to Facilitate VAT Rates by Setting Product Override
- Navigate to Settings -> Taxes and duties
- Click on European Union or United Kingdom as appropriate.
- Click Add override under Product overrides
- Select the collection you created in A above.
- Select the Country if the default is not correct.
- Enter the VAT rate as a percentage under Tax rate
- Click Add override
Any products you add to these collections will now be treated at the correct VAT rate.
It is not possible to use an automated collection to override the default VAT rate.
Any products added to this collection will be charged at a reduced rate of VAT and the line item in any VAT invoice generated will show that reduced VAT was charged. Shipping charge VAT will be calculated pro-rata based on the value of products and their VAT rate.
Step 7 - Configure your Products to Make Sure VAT and Duty Rates Work Properly
We won’t give exact instructions here as we need to assume you are reasonably comfortable with configuring products in Shopify. You may wish to bulk edit your products, export to CSV and import when fixed, or just manually adjust each product.
Here are the basic settings you need to understand and check for every product.
Under Price check that the Price shown includes tax – Shopify [almost always] works with gross prices and calculates everything from that. So if a product is €100 + 23% VAT in Ireland and €100 + 20% VAT in France Shopify will divide the price by 123 and multiply it by 120 when showing it to a French retail customer.
Under Price check that Charge tax on this product is selected if the product is taxable.
If the product is not taxable at a standard rate, make sure it is in the correct collection you set up in Stage 6 by checking under Collections
Under Shipping ensure that the Country of origin and HS Code boxes are accurately populated.
Under Category ensure that the selected Category as accurately as possible reflects the correct category for the product. Shopify uses this category to select the correct VAT rate or tax rate. We suspect this works best for sales tax in US states, but none the less keep it accurate.
Step 8 - How to Not Charge VAT to B2B Customers
EU B2B Customers (Reverse Charge Mechanism)
The only way to do this automatically at checkout that we know of is by using a third-party app such as Sufio.
If you know a customer is B2B and you are in contact with them then you can manually add and validate their VAT number in their customer profile. See instructions. You can choose if the customer pays VAT or not at this point.
GB and ROW B2B Customers
For GB B2B customers and all B2C and B2B customers in the rest of the world VAT is automatically removed at checkout. For GB B2C customers VAT is automatically removed for orders over £135.
Need Help or Advice on Shopify & VAT?
If you know your way around Shopify and you understand VAT then this article was probably enough to get you started selling worldwide with correct VAT rates. There is more you can do like charging duty at checkout, sending VAT invoices to your accounting software, more complex VAT scenarios, handling a second location in Northern Ireland or another EU country, etc, etc. Call you if you need help.