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Do I Need a VAT Number for Shopify?

Last updated on January 13, 2023 @ 1:52 am

As a business owner, you are required to collect and pay Value-Added Tax (VAT) on the products and services you provide in the European Union (EU). Depending on the country you’re located in, VAT is either charged at the standard rate or a reduced rate.

If your business is based in the EU, you will need to provide your VAT number to Shopify. Your customers will be charged VAT based on the country they’re located in and the VAT number you provide. If you don’t have a VAT number, your customers will be charged VAT at the standard rate for their country.

To add or edit your VAT number:

  1. Go to Settings > Taxes. From here, you can add your VAT registration number and select which countries your store charges taxes in.
  2. Click Add tax registration. You can then enter your business details and click Submit. Your VAT registration number will be added to your store.

If you’re running a business in the European Union (EU), then you’re required by law to charge and pay Value-Added Tax (VAT) on all of the products and services that you sell. The amount of VAT that you charge depends on the country that your customer is located in – there’s either a standard rate or a reduced rate.

PRO TIP: If you are thinking about using Shopify to sell products online, you may be wondering if you need a VAT number. The answer is that it depends on the country in which you are registered for VAT. In some countries, such as the United Kingdom, you will need a VAT number to sell through Shopify. In other countries, such as the United States, you will not need a VAT number.

If you have a registered business within the EU, then Shopify requires that you provide them with your VAT registration number. Your customers will then be charged VAT based on their country’s rates and also on the VAT number that you’ve provided. However, if you don’t have a VAT number, then Shopify will charge your customers at the standard rate for their country.

It’s important to note that if your business isn’t based within the EU but sells products or services to customers who are located within EU countries, then you’re still required to register for a VAT number and comply with EU VAT rules.

To add or edit your VAT number:

  1. Go to Settings > Taxes.
  2. Click Add tax registration.

Adding or editing your shop’s Value-Added Tax (VAT) settings is quick and easy – whether done from Shopify’s admin panel or from within the Taxes section of Settings. Simply follow these steps:

  1. Log into Shopify’s admin panel.
  2. Click on “Settings”, which is located towards the bottom of the left-hand sidebar menu.
  3. Once “Settings” has been clicked on, several options will appear directly beneath it in a drop-down menu. Click on “Taxes”.
    This will take you directly to Shopify’s “Taxes” settings page.

From here, simply enter in your shop’s registeredValue-Added Tax (VAT) information – including selecting which countries should have taxes applied to them during checkout – before clicking “Save”. That’s it! You’ve now successfully configured Shopify to collect taxes during checkout from customers located in countries where Value-Added Tax is applicable.

Do I need a Value-Added Tax (VAT) Number for my Shopify Store?

As a business owner, it is important to know when Value-Added Tax (VAT) applies to sales made by your company – whether online through an eCommerce platform such as Shopify or offline through brick-and-mortar retail sales. Depending on both where your company is based as well as where the customer receiving the goods or services is located, different tax laws may apply.
In general, if goods or services are sold within the European Union (EU), businesses are required by law to charge and pay Value-Added Tax (VAT) on those sales. The amount of tax charged depends on both where the customer receiving the goods or services is located as well as what type of product or service was purchased.
For example, under EU law there are two different types of Value Added Tax: Standard Rate (VAT at 20%) and Reduced Rate (VAT at 5%).

Which rate applies depends again both on where customer receiving the goods or services is located as well as what type of product was purchased.
If businesses are selling taxable products or services online through an eCommerce platform such as Shopify, they must ensure that they are correctly collecting any applicable taxes at checkout before order fulfillment.
(Shopify has created an easy way for business owners using its platform to pre calculate taxes prior to order submission – simply click here.) In order for businesses using Shopify stores based within Europe Union countries to ensure they are compliant with current regulations surrounding Value Added Tax collection methods, those businesses must provide their correct Value Added Tax identification numbers during account setup. (The process for adding this information into existing accounts differs slightly but can easily be accomplished by following these steps.) Only once this information has been inputted into an account will Shopify recalculate any applicable taxes at checkout using up-to=date Standard Rates for each customer location provided during purchase.

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Dale Leydon

Dale Leydon

Sysadmin turned Javascript developer. Owner of 20+ apps graveyard, and a couple of successful ones.