Shopify's recent tax updates may impact EU VAT calculations in your store. Please review your EU tax settings, save and compare them by the end of October, and test VAT calculations across different products and countries
Shopify has introduced new rules and procedures for its tax engine, which could affect VAT calculations.
EAS has asked for clarification, but the details remain unclear. Some changes may happen automatically, possibly affecting VAT calculations in your store.
Shopify notified some customers about changes starting on October 15, but updates were already made on October 7 and 8. This process is ongoing and may continue throughout the month.
EAS support will monitor stores where we have access, but we ask that you also keep an eye on your store during this period. These changes mainly impact EU tax settings and are not expected to affect UK settings.
Tax settings to check.
You will need to check and validate your EU tax settings. To do this, go to the administrative side of your Shopify store, press "Settings", find the menu option "Taxes and duties", and choose "European Union" settings.
To check your store’s performance, follow these steps:
- Review your tax settings and save a PDF copy with the date. Make any necessary corrections based on your tax situation.
- Before October 30, compare your shop’s current settings with your previously saved version.
- Test VAT calculations for different scenarios:
- Downloadable products (below and over 150 EUR)
- Physical products (below and over 150 EUR)
- A combination of both (below and over 150 EUR)
- Repeat this for 2-3 different EU countries.
- Save screenshots of checkouts and results to help our support team assist you efficiently.
Even if EAS doesn’t support your specific VAT scheme, ensure your store is running smoothly and calculating VAT correctly.
Contacting EAS
Please contact us only after testing your store and confirming that VAT calculations are incorrect. Due to high demand, our response time may be delayed by 2-3 days, but do let us know your situation.
When reaching out, include screenshots of your store's tax settings and grant us collaboration access (as Shopify may have removed it after 90 days of inactivity).
Tax configuration
Choose your VAT scheme for customised instructions:
- OSS Users
- OSS & IOSS Users
- Non-Union OSS Users
- Non-Union OSS & IOSS Users
- IOSS Users
- IOSS & DDP (Shopify Plus & Advanced Users)
- IOSS & DDP (Shopify Basic & Standard Users)
OSS Users
The store is registered in an EU country and uses the Union OSS VAT scheme for intra-EU sales.
Actions:
In this example, the store is registered in Ireland. Previously, EAS configured only the Union OSS scheme.
Shopify has either added or will add a new Irish VAT registration. Customers should transfer their OSS VAT number to the Home VAT registration.
Ensure that VAT is collected in the country of Union OSS registration. Check that the "Collect VAT in an EU country" notification is grey, not yellow.
Result:
OSS & IOSS Users
The store is registered in an EU country and uses both the OSS and IOSS VAT schemes.
Actions:
Customers should ensure that VAT is being collected in the country where their Union OSS scheme is registered.
In the example below, the store is registered in the Netherlands. Initially, only the OSS scheme was configured by EAS.
Shopify may have added or will add a new Dutch VAT registration. Customers should enter their VAT number into the home country VAT registration (in this case, the Netherlands). Ensure that the "Collect VAT in an EU country" notification is grey and not yellow.
Non-Union OSS Users
The store is registered in a non-EU country and uses the Non-Union OSS VAT scheme for EU sales of downloadable items/services.
Actions:
Customer should check and ensure that IOSS scheme is enabled in the store. No other tax registrations should be present in the settings.
Non-Union OSS & IOSS Users:
The store is registered in a non-EU country and uses the Non-Union OSS VAT scheme for downloadable items/services and the IOSS scheme for physical products.
Actions:
Ensure that only the IOSS scheme is active, and delete any additional VAT registrations. No other tax registrations should be present in the settings.
IOSS Users
The store is registered in a non-EU country and uses the IOSS scheme for physical product sales.
Actions:
Ensure that only the IOSS scheme is active, and delete any new VAT registrations. No other tax registrations should be present in the settings.
IOSS & DDP (Shopify Plus & Advanced Users)
The store is registered in a non-EU country and uses the IOSS scheme for physical product sales and DDP settings for orders over 150 EUR (Shopify Plus and Advanced Shopify plans).
Actions:
Ensure nothing is configured under "Collect VAT in an EU country," while the IOSS scheme and duties are enabled.
IOSS & DDP (Shopify Basic & Standard Users)
The store is registered in a non-EU country and uses the IOSS scheme for physical products and DDP settings for orders over 150 EUR (Basic and Standard Shopify plans).
Actions:
Ensure OSS-enabled taxation is active for orders over 150 EUR
Additionally you need to create and enable a location in any EU countries :
EU location should be active but may be set as not allowed for fulfillment:
Always test orders over 150 EUR to a few EU countries to ensure VAT is calculated correctly.