Override VAT rate - Configure multiple rates settings

If your company is VAT-registered and you sell products subject to a non-standard VAT rate, you must create a tax override to replace the standard rate with the special rate.

For example:

• In Romania the standard VAT rate is 21% (starting with 1th August) and the special VAT rate is 11%

• Shopify calculates the standard VAT rate 21% so for the products with special VAT rate you need to do an override so Shopify will calculate the VAT rate accordingly with your settings.
   

Step 1. Make sure you have already configured the VAT settings. 

 ➡️ Click here for the VAT payer settings

Step 2. Create a product collection in Shopify for each group of products that use a different VAT rate.  

• Create one product collection per VAT rate you use in your shop. 
• Assign each product to the collection that matches its applicable VAT rate.

Shopify > Products > Collections > Create collection

 Example:

• Name the collection so you can easily recognize it and assign the appropriate products to it: 

                -  11% VAT rate products

• If the default VAT rate in your country is 21%, then you only need to create a VAT override for the collection with 11%. 
  Exception is for the situation when Shopify doesn't calculate the standard VAT accordingly, so you need to do an ovveride from 19% to 21%
  

Step 3. Add the collections to the Product overrides list.

Shopify will overwrite the default VAT rate with the one you save here:

Shopify > Taxes and duties > European Union > Product overrides > Add product override

• select a product collection*
• add a VAT rate 
• click on Add override

*Here you can see only the manually created collections.
The automatically generated collections will not appear in this 'Filter collections' list.

The result:

Check if you followed the settings correctly:

- Go to Shopify > click on the order number > check the order details.

Example:

The order contains two products: one is taxed at 21% and the other at 11%. Shopify automatically applies 21% VAT to all items, but the special product has been overridden to 11%. As a result, the order ends up with two different VAT rates.

Important note! 

These settings apply only to new orders—that is, orders placed after the settings were saved. Any tax changes you make to products will not affect existing orders; they will apply only to orders created after the new settings take effect.

Feel free to contact us if you need any further information:

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E-mail: support@xconnector.app

Phone: +4 0373 747 991