Setting up duties and taxes for markets

You can configure how taxes and duties are displayed and collected for regional markets. Duties and taxes customizations let you set tax-inclusive pricing for regions where it's expected, collect duties at checkout for international orders, and manage customs information for your products.

Duties and taxes customizations control two things for a market:

• Tax display: Whether taxes are displayed as included in the product price or added as a separate line item at checkout.
• Duty collection: Whether duties and import taxes are calculated and collected at checkout for international orders.

Different regions have different expectations for how taxes are displayed. For example, customers in Europe, the United Kingdom, and Australia expect prices to include tax. Customers in the United States and Canada typically expect tax to be added at checkout.

Considerations for using duties and taxes for markets

Before creating duties and taxes customizations, review the following considerations:

• Duty calculations are estimates based on product Harmonized System (HS) codes, country of origin, and the customer's location. Actual duties charged by customs authorities might differ.
• Some countries have de minimis thresholds below which no duties are charged. Orders under these thresholds aren't charged duties at checkout.

Duties and taxes inheritance

Submarkets inherit duties and tax settings from their parent market by default. If you customize duties and tax settings on a submarket, then they override the parent's settings. If a submarket has multiple parents with different duties and tax settings, then the setting best suited to the customer's location is used.

Add a duties and taxes customization to a market

1. From your Shopify admin, go to Markets.

2. Click the market that you want to customize.

3. Click next to Duties and taxes.

4. If you don't already have taxes configured for the region the market includes, then click to update your tax settings.

5. Configure your tax display settings:

   • Dynamic tax display: Product prices include taxes in regions where appropriate, such as Australia or the European Union. Product prices exclude taxes where appropriate, such as Canada or the United States. Select this option to automatically present prices as your customers would expect.
   • Show as included: Taxes are included in the product price displayed on the storefront. Customers are informed of the tax amount at checkout. Select this option if your product prices already include taxes. You're responsible for setting prices that include tax.
   • Show as line item: Taxes are calculated and displayed as a separate line item at checkout. Select this option if your prices don't include tax and you don't want to include tax in your prices for any region. This option keeps the prices on your product pages low, but might negatively affect your checkout rate in areas where customers expect a tax-inclusive price.

6. Configure your duty display settings:

   • Show as line item: Duties and import taxes are calculated and added to the customer's total at checkout. Select this option if the prices of your products aren't already adjusted for duties. This option keeps the prices on your product pages low, but might negatively affect your checkout rate.
   • Duties included in price: You absorb the duty costs rather than charging them to customers. Prices aren't increased on your product pages or during checkout to account for duties. Select this option if your prices already include an adjustment for the cost of duties.

7. Click Done.

8. Click Save.

Collecting duties and import taxes at checkout

You can calculate and collect duties and import taxes at checkout for international orders. When activated, estimated duties are displayed for customers during checkout and paid upfront, which reduces surprises when their package arrives.

Requirements for duty collection

To accurately calculate duties, your products must have HS codes and a country or region of origin assigned. Learn more about duties and import taxes.

Add HS codes to your products

Harmonized System (HS) codes classify products for international trade and are used to calculate duties. If a product doesn't have an HS code, then duty calculations are based on the product's description and category instead, which might be less accurate.

You can add HS codes to your products in the following ways:

Add HS code on the product page

1. From your Shopify admin, go to Products.

2. Click the product that you want to edit.

3. In the Shipping section, click HS code.

4. Select a Country of origin.

5. Enter an HS code. If you don't know the code, then start typing a product description to search for the appropriate code.

6. Click Save.

Add HS codes with the bulk editor

1. From your Shopify admin, go to Products.

2. Select the products that you want to update.

3. Click Bulk edit.

4. Click Columns, and then select Harmonized system code from the Shipping section.

5. Enter HS codes for each product.

6. Click Save.

Add HS codes with a CSV file

You can export your products, add HS codes and country of origin in the CSV file, and import the updated file. The duties and import taxes CSV includes columns for Country of origin and HS code.

Set a default country of origin

If most of your products are from the same country, then you can set a default country of origin. This is used for duty calculation when a product doesn't have an individual country of origin assigned.

Steps:

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Customs information section, click the menu icon.

3. Click Default country of origin.

4. Select the country.

5. Click Save.