Duty & Tax for Shopify
Setup instructions
Install the app
Install the Glopal’s Duty & Tax calculation solution (get the installation link from your account manager)
Approve the subscription following the prompts in your Shopify admin
Configure the markets
Click on a Not Configured tab to select the market for which you want to set up the duty & tax calculation
Note: If you do not see a needed market in the list, add it in the Shopify Markets configuration.
Click on the market
Select At Checkout if you want to show the calculation at the checkout or select After Checkout if you want to absorb duty & tax amount.
Specify how your prices are set in the product catalog. Those could be Net, Duty included, Tax included, Duty & Tax included (Gross prices).
Note: Depending on your catalog prices set up, Glopal will apply a Forward or Reverse calculation strategy.
If your product display prices are net (exclusive), we will apply Forward calculation. With this strategy, duty & tax amounts will be part of the shipping costs, providing customers with a clear breakdown at checkout.
If your product display prices are gross (inclusive), we will apply Reverse calculation. This strategy determines net prices for carrier declarations, optimizing margins by calculating backward from the final price. The buyer will see no additional amounts on the checkout.
If calculating at checkout, Glopal returns duty & tax calculation as part of the shipping option on top of the shipping rate you define:
Select the delivery type
Select the incoterms (DDU or DDP)
Select a fulfilment location
Set the price
Select a currency
The market is successfully configured. Repeat the steps for other markets
Configure Checkout UI extensions (Shopify Plus only)
If you enable “At Checkout” calculation, it is recommended to configure the Glopal Checkout UI extension. This extension is essential for accurately calculating duties and taxes on discounted prices when using Shopify automatic discounts or discount codes. It also provides a clearer breakdown of delivery costs into Shipping, Duty, and Tax.
Verify both blocks are added:
FAQ
How do I disable Shopify Taxes?
In order to setup and use Gross reverse calculation you will first need to disable the Shopify Tax Engine and configure your pricing to not include taxes:
Open your Shopify Admin
Settings → Taxes and duties page.
Scroll down to the Tax Calculations section.
To exclude tax from your product prices, uncheck the "All prices include tax" checkbox.
To disable taxes in Shopify, you can set your products to not include taxes - depending on how you’ve configured your Shopify store this can be achieved in multiple ways. For more instructions on exactly how to execute Shopify have a page on their website titled Tax overrides and exemptions which details all the different methods.
Why should I pick net pricing?
This aligns with the diverse tax regulations and compliance requirements of different markets, especially for companies operating internationally.
By displaying net prices, the company can maintain a consistent pricing strategy across various regions, irrespective of the local tax rates. This uniformity in pricing aids in straightforward comparisons with competitors and helps in setting a clear and transparent price structure for customers worldwide.
This method can be particularly beneficial for companies looking to expand their reach across borders, offering them flexibility in pricing and compliance with local tax laws.
Why should I pick gross pricing?
The gross pricing approach is particularly appealing in simplifying the customer experience. When customers see a gross price, they encounter no surprises at checkout, as the price they see is the price they pay.
For companies aiming to provide a straightforward and hassle-free shopping experience, especially in a global market, this method is quite effective.
However, this strategy requires the company to absorb the variability in taxes and duties when shipping to different countries, impacting their profit margins. To manage this, companies often employ sophisticated pricing strategies, taking into account the average tax rates and duties across various markets to ensure overall profitability.
This approach necessitates a deep understanding of international trade regulations and a dynamic pricing model that can adapt to market changes.
Despite the challenges, this method can position the company as customer-centric and easy to transact with, qualities that are highly valued in the competitive e-commerce landscape. By prioritizing customer experience and pricing transparency, companies adopting gross pricing can build strong brand loyalty, which can be a significant competitive advantage.
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