Setup your Shopify Taxes Correctly (only 5 min!)

taxes can seem scary, I get it, but it doesn't have to be so. let's break it down real quick. when you're selling online, you need to collect sales tax for any item that you've sold. however, each state does it a little bit differently, which just makes it super confusing. so some states you only have to collect sales tax if you have a physical location there, like if your business headquarters is there or if your Warehouse is there that you're shipping the products out. of other states it's based off of a revenue threshold of how many sales you're making for products in that state, which is called an economic Nexus, and each state also has different levels of the threshold here. just to make it even more confusing, some states you don't have to collect sales tax on different types of products, like in New Jersey, you don't have to collect sales tax on clothing or Footwear. in California, you don't have to collect sales tax on food that is consumable. it can get really confusing, but, thank, hopefully there is a better way to manage it all and make sure that you don't end up with a huge unexpected tax bill. you used to have to manage all this individually with a third-party Shopify app or just your own bookkeeping team. but thankfully there is a new feature called Shopify tax. that makes it all a lot easier and all just in your Shopify backend area. so you want to make sure that you've actually opted in for this new feature of Shopify tax, because it is free for your first hundred thousand dollars in online sales and then after that is just a small fee to management. moving forward. so you can get to this area by going to your settings and your Shopify back-end and then taxes and duties, and you can then set up there which individual states you need to be collecting sales tax for and it'll start showcasing, based off of your thresholds, of how many sales you have in each state as well. so it'll notify you when you need to start collecting sales tax in a new state and start showcasing what tax that is, make sure it's charging it to the customers, as well as showing you what that is on the back end, so you can make sure that you are saving accordingly. a key feature in getting this to work correctly is making sure that your products are categorized correctly within Shopify, and you can find this area in the taxes and Duty section as well. but this way it helps Shopify know, based off of different states that charge taxes for different types of category of products. it'll let Shopify know what type of category your product is in and make sure it is charging the appropriate sales tax or not charging sales tax based off that. so you want to make sure that you go in and make sure all of your products are categorized correctly. so, just to make this even more confusing, this is just sales tax that I'm toking about right now. this is not income tax, which each state charges individually, or each country charges individually as well, and you'll have a federal income tax. so this is where it gets even more confusing and, honestly, I'm not an accountant, I'm just a web designer. so I highly recommend that you reach out to an accountant and get all this set up, because you do need to be paying an income tax for the state or federal level that you are in to make sure that you're paying taxes off the money that you've made from your business- again, not an accountant. so make sure you hire someone that can help you with all of this and and set everything up correctly from the very beginning- a book that I have found really helpful, and just setting up your business correctly is profit first. it really helps me understand kind of just how I need to set up different systems in my business, as well as how much money I need to save for operating expenses, taxes, all those things and, of course, paying myself as well. so I highly recommend this book if you're interested in more kind of business fundamentals behind the scenes information, and I'll put a link to it in the description below as well. I'll be honest, I actually made a huge mistake and did not set aside enough taxes in the first year of my business and it was a pretty uh bill. so do not make the same mistake. and if you want to see more lessons that I've learned along my entrepreneurship Journey over the last 12 years, then check out this video over here. I've got more tips and things that I recommend you doing and not doing as well to help you along the way.

How to set up EU taxes in your Shopify store in 2022

Hi, I’m Djimi, the tik Support Lead at Sufio, and today I will show you how to set up taxes in Shopify if your store is based in the EU. If you are a Shopify store owner based in the EU, you need to know when to charge VAT and what tax rate applies to which customer. In this video, you will learn how taxes work for stores based in the EU and how to set them up in Shopify. The most important distinction for charging VAT is whether your business is VAT registered or not. Many businesses start as unregistered, especially if the taxable turnover in the last twelve months has been less than the VAT threshold of the country in which the store is based. In such a case, you would not have to register for VAT, and it means that you do not charge VAT on your sales, regardless of where your customers come from. Once your annual taxable turnover reaches this VAT threshold, you have to register for VAT and you will start charging VAT on some of your sales, depending on where your customers buy from. And then you will also have to include your VAT registration number on your invoices and receipts to make them valid. Suppose you are VAT registered When selling to customers in the same country as your store, you are required to charge VAT. If you’re selling to a different country within the EU, you have to distinguish whether you are selling to a consumer or a business. When selling directly to consumers, you should always charge VAT. However, you should tax-exempt businesses registered in other EU countries, which means not charging VAT on B2B sales outside your home country. Lastly, if your customer resides outside the EU, you do not charge VAT On such orders. you will need to report the sales VAT for taxation purposes as sales with 0% VAT. Now let’s look at what tax rate applies to which customer. When selling to customers in your home country, you should use the applicable VAT rate in your country. When selling to consumers, that is, non-VAT registered customers from other EU countries, the VAT rate you should charge depends on the type of VAT registration you have applied for. If you sell to customers in the EU and your taxable turnover during a calendar year to all other EU countries combined does not exceed the threshold of 10,000 euros excluding VAT, you may qualify for a so-called micro-business exemption. To use this taxation scheme, you need to apply for it at your local tax authority and only have a single VAT registration in the European Union. Once you apply for it, you will charge the VAT rate of the country your business is based in on all your sales within the EU. Let's illustrate this with an example. Suppose you have a business based in Germany and you received an order from a customer in Spain. Under the micro-business taxation scheme, you will charge the German VAT rate. But what if your taxable turnover outside the country your store is based in, but still within the EU, equals to or exceeds the threshold of €10,000, excluding VAT? In such a case, you will need to register for VAT in each country you are selling to and pay their VAT rate. This means that customers from different EU countries will be charged with varying VAT rates, ranging from 17% to 27%. For example, suppose you have a business based in Germany and you offer goods to consumers in Belgium and France. However, during a calendar year, you have surpassed the VAT threshold of 10,000 euros selling in Belgium. Due to this, you will have to register for VAT in both Belgium and France, and you will also have to charge Belgium VAT on goods sold in Belgium and French VAT on goods sold in France. When breaching the threshold, registering for VAT in each EU country can become time-consuming and quite complicated. For this reason, you can choose to use the One-Stop Shop Union scheme, also known as OSS. This will allow you to submit a single VAT return for all your sales within the EU whilst still retaining the ability to charge different VAT rates to EU customers, varying from country to country. Remember, these rules only apply to B2C, that is, non-VAT registered consumers only When selling to businesses with a valid VAT registration number in other EU countries, you do not charge VAT. Such customers should be set as tax-exempt in your Shopify store. Moreover, you should capture and validate their VAT registration numbers before allowing them to purchase your products. Sufio can help you capture and validate EU VAT numbers from your business customers in your Shopify store and, if applicable, set them as tax-exempt. In addition, you will be able to include the VAT numbers of your customers on your invoices so that they are valid and compliant with accounting legislation. Alright, now that we’ve looked at how taxes work in the EU, let me show you how to set them up in your Shopify store. To be able to charge VAT to some customers and not to others, Shopify allows you to choose from two possible configurations. These are based on how you want to display product prices in your online store. Let's have a look at them together. In your Shopify admin, go to the Settings → Taxes and duties page. On the bottom, in the Tax calculation section, we can find a checkbox that allows us to indicate whether our product prices include tax or not, In other words, if the product prices that we entered on the Products page include or exclude tax. Now, if this checkbox should or shouldn't be checked primarily depends on who you are selling to and what the legislation in your home country suggests. In case your sales are predominantly to B2B customers, you can most probably have your product prices as VAT excluded, so you can uncheck this option to indicate such a thing. On the other hand, if you are selling primarily to consumers or the legislation in your country requires you to display tax-inclusive product pricing, you can check this checkbox to indicate that your product prices are VAT included. However, if you're selling to both B2B and B2C customers and you want them to have the ability to be tax-exempt when applicable, make sure that the Include or exclude tax based on customer's country checkbox is checked. To do that, head over to the Markets page, click on Preferences and check the Include or exclude tax based on your customer’s country checkbox. Don't forget to save your changes. At this point your product prices should be all set. Now let's look at how you can set up your store so that you can charge your customers the correct VAT rates. Shopify calculates tax rates automatikally based on the type of registration you specify in your tax settings. Let me show you how to set it up In your Shopify admin. go to the Settings → Taxes and duties page. Here in the Countries/regions section, click on European Union and finally click the Collect VAT button. Now you’re presented with three different options for the type of VAT registration you have, As we've discussed earlier in this video. if your taxable turnover outside the country your store is based in, but still within the EU, equals to or exceeds the threshold of €10,000 excluding VAT and you applied for the One-Stop Shop taxation scheme to submit a single VAT return, choose the One-Stop Shop registration option. This will make sure that your Shopify store charges VAT at the rates of the countries you ship to. If you haven't surpassed this threshold and applied for the Micro-business exemption, select the second option to charge your domestik VAT rate on all your orders. If you hold a VAT registration in all EU countries you ship to and continue submitting VAT returns in each country separately. choose the Country-specific registration option. After that, click Next and, from the dropdown, select the country where your VAT registration is based and enter your VAT number in the field below. In case you have applied for a VAT number but don't have one yet, leave this field blank. You can update it later, when you receive it. Fina.

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Taxes for Shopify Store Owners

taxes. they are not fun, but they are a very important part of e-commerce because you need to be collecting sales tax for different orders and you'll also have taxes that you need to pay to your own government. so in this video, we are going to go over the different taxes for small businesses and how to make sure that you are staying within the law for all of that and paying on time, okay? so since we are toking about taxes, let's start out with a huge disclaimer for this video: that i am not a tax accountant. i am not a cpa. i have no certification for toking about taxes. i am just toking as an e-commerce entrepreneur and a small business owner myself, and i've been paying taxes for over 11 years for my small business. so i'm toking from my perspective here. so make sure that you still contact a tax accountant in your area and you verify everything with them to make sure that everything is set up correctly and that you are paying your taxes correctly, okay? so now that that's out of the way, i want to tok about the different types of taxes that you have to pay whenever you're doing an e-commerce store. so, first off, you do have sales tax that you need to collect, and this is going to be depending on where your location is and what country. so i'm going to have this video toking specifically about the us, so it's going to be different depending on the country that you're in or that you're selling in. however, in the us, you need to be collecting sales tax anytime you have a physical location in a state. so that could be that your office is in one state and your fulfillment center is in another state. you would need to be collecting sales tax in both of those states because you then tiknically have a physical presence in both states. you also have to do sales tax collections based off of an economic nexus, so there are different requirements for different states based on if you have so many transactions in a state or if you have a certain dollar amount that you have sold online in the state. so this can get a little bit confusing. so we'll go over the best way to do that in just a minute. but this is a newer tax thing that has been added in the last few years that you want to make sure, if you're doing a higher volume of e-commerce sales online, that you're being really mindful of. so, first off, when you're setting up charging sales tax by a physical store location. you can do this inside of the shopify backend, so you would just go to settings and then taxes and you can add in your tax location there. so you would add in your zip code, so it'll add in the correct tax information based on the state that your physical location is in. so this is an important one to make sure that you have set up so that it's just calculating taxes overall based on the physical location. but, as i mentioned before, you also need to keep in mind the economic nexus. so this is different for each individual state, which can be a little frustrating since the us has so many states to keep up with and shopify really isn't set up for going through and keeping track of all this information. plus, shopify does not file any taxes for you, it's just charging the customer and it is on you and your responsibility to make sure that you are setting aside that money for taxes and paying that correctly to each individual state. so for this i really recommend a third-party app called tax jar. so tax jar lets you actually see the economic nexus so you can see how much you are getting close to that of needing to collect sales tax in partikular states, so it'll keep track of how many transactions you've had in a state, how much revenue you've brought in in a state, so it's really helpful for keeping track of all of that information so that you don't have to have a huge spreadsheet that you're constantly updating with every new order. also, with the tax share app, they do automatikally file taxes for you once you've got that set up. so, once you have registered that you need to file sales tax in a state, you can then put all that information into tax jar and get that set up. so it's a lot easier for you, especially if you end up having to file taxes in a lot of states based on your online orders and revenue. so i definitely recommend taking a look at tax jar if you are expecting a high volume of orders and you are expecting to have more things that you're qualifying for in terms of different states that you're needing to pay taxes on. i'll put a link to it in the description below, but definitely an app to check out. so that's just the sales tax portion of it all, though you, as an individual, will have to pay taxes on any income that you have received from your business, so this is going to depend a lot based on how you have your business set up. if you are set up as a sole proprietor, so as an individual, if you are an llc, a single member, llc, an, s, corp, a, c corp- however you have set up your business entity, that really depends on how the taxes that you are having to pay are structured out. so i'm not going to get into all of that again. make sure to reach out to a tax accountant and make sure that you're paying the correct taxes for you. but overall, you need to pay taxes on any income that you have received from the business. so you can write off things like expenses, so your cost of goods, of any kind of cost of actually shipping out the or fulfilling the product itself, of the shipping cost, any marketing costs like paid advertising or if you've hired independent contractors to do designs for you, you can deduct all of those as expenses from the business account and you don't have to pay any taxes on that income. that is. there also any income that you leave inside of the business for future months of running expenses. you don't have to pay any income tax on that as well. it's just the money that you're taking out personally as profit from the business and again, that does vary really wildly based on the entity structure that you have set up for your business. so, overall, you just want to make sure that you are reaching out to a tax professional in your area and that you have everything set up. the last thing that you want is to be hit with a huge tax bill that you weren't expecting and you don't have the money set aside for that. one's gonna hurt really bad and it's going to hamper your business growth if you're then having to take additional money from the business or from your own personal accounts to pay off taxes that you hadn't prepared to pay for. so you want to just make sure that you're thinking ahead and setting aside whatever money that you're collecting for taxes- whether it be sales tax or income tax- that you're going to pay personally. so i hope this video was helpful for you in deciphering a little bit more about the different taxes that you have to pay for a small business and for e-commerce stores. we've got a couple more videos over here all about growth strategies, so how to actually grow your shopify store for 2021, and if you haven't yet subscribed to this channel, make sure to hit that subscribe button below. we post videos every week all about shopify and how to grow your online store.

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Shopify Tax How and When To Collect Sales Tax [NEW FEATURES]

All, everyone Christian here- did you know in the US alone, you need to ensure that you're properly collecting taxes across 46 states and 11,000 different jurisdictions, And if you don't, you have to pass, go and go directly to prison. Okay, That last bit was a little bit extreme. but let's tok about the super sexy topic of taxes. US sales tax is very complex and it can be discouraging for a lot of you folks out there. Now Shopify in the recent months have overhauled their tax features to make things a little bit smoother for merchants, And you might have already seen a little bit of this. but now they're actually giving it a proper name and it's called Shopify Tax. So what is Shopify tax? So Shopify tax puts sales tax insights and collection in your control and makes everything manageable from your Shopify admin. So at a glance you'll know when you're liable, with a state by state overview. It also reveals where you're approaching a tax threshold, so allowing your business to actually prepare for the taxes that are going to be coming. with Shopify tax, You can also apply the right taxes at the right time, with calculations based on the buyer's precise address. There's also known as workshop accuracy. Shopify takes care of all of this in the background, so you don't have to do a whole lot of things Now. they also make sure to collect the right taxes for the right products. So adding product categories is going to be an absolutely crucial part of the process of adding new products to your store, And we'll tok a little bit more about this here in a second. Now, before we move on, I just want to say my name is Christian Keenan, one of the co-founders here at that brand, or an e-commerce growth entity that specializes in helping clothing stores grow and scale profitably online. We do have new videos every week, so make sure that you hit that Describe button- Turn on notifications so you don't miss out. Now let's tok about pricing. Nothing in live is free, right. So Shopify tax is going to be a new service that automatikally gets added to your store and you cannot really turn it off Now. for the rest of 2022, you won't have to pay anything extra that size of what you're currently paying right now for your Shopify subscription. It is going to be free forever for the first $100,000 in US sales each calendar year. after the $100,000, a point 35% fee or 4.25% fee for plus merchants will apply for subsequent orders that calculate sales tax in the US online. also, as a promotion for the next year, 2023,, the total annual Shopify tax costs will be capped at $5,000.. Now, the only bad part is that this is just for Shopify plus stores, So anyone below there won't be a cap for next year. Now another question that you might be asking is: what about outside the US? While Shopify tax is built right now exclusively to manage your US sales tax obligations, hopefully in the future they will manage international and global taxes, But right now, it just seems like they're really harping on focusing on US sales tax obligations. I believe, from what I've read, that they want to become very an all encompassing platform. So adding taxes globally and managing that will probably be something that they add sometime in the future- Not even close, but sometime in the future. Now, managing numbers and data and all this stuff can be very cumbersome. Now I want to let you in a little secret. It's not tax related, but it's all an analytiks and metrics related right. We're using a tool called trivia wealth for all of our client and group coaching members, And this tool allows us to see the lifetime value of a customer at 30,, 60, 90 days, But we're also very excited about the estimated action of customers. So just a slight little feature in there. So imagine being able to send out email campaigns or ad campaigns to customers who are actually likely to buy from you a second or third time And knowing when to exactly send out these marketing messages. after the will of super, super powerful, it centralizes all of your metrics all into one place. They simplify, inform and save you time. So make sure to check out the link in the description below. There is a slight little discount code in there for you. If you want to try this, try out triple. Well, for the first time- now we've toked about a little bit of product Categorization is going to be very important moving forward. So let's tok about product categorization. So, is a hot dog distinguish? as a society, we may never agree on the answer. I believe Erin is in the camp of it's a sandwich. I don't think it's a sandwich. What do you? what do you think? Let us know down in the comments below If a hotdog is a sandwich at Shopify, they can help you categorize your hot dog, for tax purposes at least. So they may not have that answer, but they'll be able to help you categorize that. So, for example, if you live in New York, you may find that you pay a tax when you buy a hot dog from a local stand, but not when you buy a pack when you're doing your neighborhood barbecue. So in each state different rules of the amount of tax that needs to be charged will be different on a per product basis, right, or what you use the product for. So that's where smart categorization comes in And this new feature helps you figure out these rules when you add new products to your store And really the smart categorization based on the titles and the description of the actual product that you're putting in Shopify will automatikally recommend you a product category. So once you approve or modify, then it will automatikally assign a proper tax rate based on local regulations. So if you're adding shoes and you're typing in the product title that this is a Nike Air Force, whatever, and the description it toks about being a shoe, then the product category- you will see that it will showcase it's a shoe, right, And all you have to do is just approve it or potentially modify it Right, depending on on your store and what you have currently. And if you like what you see, please consider clicking on that like button. It really help us out at all One of my YouTube videos without an actual sprint reporting, Right? So let's jump in and kind of show you around a little bit of the tax and duties section. So right now, if you go to your settings and then you go to taxes and duties, you will see this brand new banner and here it will say: stay compliant in the US with Shopify tax. and you might actually see some notikes in here. So this one says you're not charging taxes on some product variance and this one says you may have sales tax liability in four different states. So all these things you need to make sure that you're checking inside of your admin settings, taxes and duties. I'm going to click on Review US tax settings here for the new Shopify Tax And in here you'll see like there's manage a tax collection, tax rate exemptions reporting, manage your tax collection. It will actually give you, like I said, a state by state breakdown of where you're actually liable for taxes or blur some of these things in here. So you know that and then categorize your products for tax purposes. So in here you see we have 1400 products that we need to review for this store. So again, it's time consuming process and you have toward the end of this year really to kind of figure all these things out, because it will start 2023. So it's very important that you have all these things figured out Now. when you manage categories here for the products, you will see right within here It will actually show you the products and it will give you the product category, So very quickly you can actually at a glance change things around And, like I said, obviously there's a smart categorization So it will automatikally tell you what that, what it thinks that product is. All you have to do is just approve, deny or modify it. All right, So there you have a Shopify tax. They're actually making it a lot simpler for you t.

How To Charge Taxes On Your Shopify Store | Easy Method

how do you charge sales tax on your shopify store, how do you pay your sales tax and all that stiky stuff coming up in today's video? hello, hello and welcome back to the channel. if you're new here and we don't know each other, you've never met me. my name is carrie, i'm the founder of shirt school and i created this channel to bring you the best strategy, secrets and hacks to grow your online t-shirt apparel or print-on-demand business, and in today's video, we're once again toking about my favorite thing in the world: taxes. if you're anything like me, taxes just give you a headache and they're just constantly frustrating and it just feels like i'm always paying taxes, so taxes really stink. but luckily, today we're going to specifically be toking about sales tax on your shopify store and i'm going to show you the easiest way that i've found to collect it and actually pay it to your state and how that all works. this is a question i get all the time like gotta be. one of the most asked questions is about sales tax and how to collect it, when to collect it and how to pay it- all that kind of stuff. so hopefully today i can bring some clarity to this question and help you out. the first thing i want you to know about sales tax is that you only pay sales tax on sales that you make inside your state. okay, that's one of the beauties that we have being an online business is that we don't just sell in our state, locally. we sell all over our country and maybe all over the world, and we don't have to pay sales tax on any sales outside of our state of residence. they call this sales tax nucleus, and so you have to pay taxes in any state in the united states where you have nucleus. now that basically means you just have to have like an office or some kind of residence there, right? so for most online businesses, especially small businesses, you're only going to have that nucleus in one state. wherever your business is located, even if you're running from your home, you're going to have to have a physical address, and so most likely for most of you, that's going to be inside your state only. to use amazon as an example, amazon has fulfillment centers and offices all around the united states, so amazon has to charge taxes in most states in the united states. that's why, even though amazon might be based in a certain place, they have, since they have facilities all over the us. they have to pay sales taxes on all the sales in those states, but luckily, since we have a small online business, you most likely only have that one location and so you're only going to pay sales tax on the sales that you make inside your state of residence. okay, the last thing i want to say- and then we'll get into the tutorial on actually how to set this all up in shopify- is that i've said it a lot and it's another question i get that's very related, and i recommend that you don't get your llc or your business licenses before you actually have some sales under your belt. right? i recommend that you get started on shopify without doing all of the the llc's and business licenses and sales tax permits. go ahead and get a few sales under your belt before you actually get your business license and you start paying your sales taxes. you want to make sure this is something that you want to continue with. so a lot of people really stress out when they're first starting and luckily you don't need to stress because you can actually claim: you know, put your under your social security number on your taxes. you can put your sales under there. you don't have to worry too much about sales tax when you're just starting out. but once you have some sales and you know that this is going to be something long-term for you and that you're going to stik with, you want to make sure you do get your llc, get your business license, get your sales tax permit and you start paying that sales tax each month. if you are just starting out, you're brand new and you're watching this video and you're like: i don't have my business license. okay, i recommend that you go ahead and set up sales tax in your shopify account so that you are collecting it. but go ahead and just set it aside. hold on to it, just in case you need to pay those sales taxes later. that's what i recommend. you don't necessarily have to do that, but even if you don't have your business license, i would just turn it on, collect it, put it aside, maybe in a separate account, so that you're not tempted to spend it, and just so you have it there in case you need to come back and pay those sales taxes. hey, if you're getting value out of this video, smash that like button and also make sure you subscribe to the channel and hit that bell icon. when you subscribe and hit the bell. you're gonna get notified each week when we put out videos. now, as much as i hate toking about taxes, i know you love hearing about it, so i plan to put out more videos related to this kind of content. so if you want to see that, make sure you subscribe back to the video. okay, jumping into shopify inside of uh test account that i have here. i want to let you know setting up sales tax in shopify is actually a very simple process. a lot of people get really scared of how to do this, and it's- it's actually pretty simple. so all that you want to do is go to your settings here and you're going to want to go to taxes right there, right, and so we have, uh, some different options here. you're welcome to look through these and see if you you want to use any of those options. what we're going to want to do here in the united states, we're going to want to go right here and hit setup. okay. now the great thing about shopify is, once you set this up, it's going to automatikally calculate all the sales tax for all the counties in your state and it's just going to do all the hard work for you. so you're going to hit this collect sales tax button and you're going to select your state of residence- and i will select oklahoma, right here- and then we're going to simply hit collect sales tax. okay, you don't have to put in your uh, your actual sales tax id. you can go ahead and start collecting it without that and put that in later, as you saw me do there. so after you've done that, that's it. that's all you have to do in shopify. so after this first step, your customer is going to have to pay the additional sales tax on any purchases that they make if they are inside of your state. this is not a big deal. if somebody, if you go down to the convenience store, you buy something, you're going to expect to pay sales tax. so here in oklahoma, for instance, if i have somebody joe down the street that buys something from my store and he's in oklahoma and i'm in oklahoma, he's going to expect to, say, pay sales tax. so once you've set this up, your store is already collecting sales tax. you don't have to do anything else on your shopify store to actually collect the money. i do want to make sure you understand that shopify will not pay your sales taxes for you. they are simply going to collect it from the customer and give it to you and it's just going to get lumped in with the revenue that you're making and you're collecting from your sales. so you're going to have to actually put it aside and not spend it, so that you have the money there to pay your sales tax. step number two: you're going to want to find where you pay sales taxes inside of your state. now, keep in mind: you only want to do this if you already have your llc, your business license and your sales tax permit. okay, you have to have that before you can do this. so make sure you get your business license, get your sales tax permit. then you're going to want to find where you pay taxes. okay, here in oklahoma, it's okay, tap. this is the website i know most of you guys aren't watching from oklahoma, but just to give you an idea of what this looks like. now, here in oklahoma, we have to remit our sales tax every single month by the 20th of the month for the previous month. so all you're going to want to do here is simply get your- uh, your account set up with whatever, whatever website for your st.

How to set up EU taxes in your Shopify store in 2020

Hi, I’m Jan and in this video I’m going to show you how to set up taxes in Shopify if your store is based in the European Union. If you have a Shopify store in the EU, you should understand when to charge VAT on your sales and which rate to apply to which customer. In this video, you will learn how taxes work for stores based in the EU and how to set them up in Shopify. The most important distinction when it comes to charging VAT and generating valid invoices in your store is whether your business is VAT registered or not. If your annual turnover is below a certain threshold, you do not have to register for VAT. In that case, you do not charge VAT on your sales, regardless of where your customers come from. If your business is VAT registered, you have to charge VAT to some of your customers and include your VAT registration number on your invoices. Whether or not you charge VAT on a specific sale depends on which country your customer is in and whether they’re a consumer or a business. When selling to customers in the same country as your store is located, you are required to charge them VAT. If you’re selling to a different country within the European Union, you have to distinguish between consumers and businesses, You should charge VAT to consumers. however, you do not charge VAT to your business customers. If your customer resides outside the EU, you do not charge them VAT at all. So out of these four scenarios, you charge VAT to your customers only in the first two cases. Now let’s look at which VAT rate applies to which customer. If your customer is from the same country as your store, you of course have to charge the VAT rate of your country. Setting up tax rates in different countries of the EU can be a little tricky, as you need to charge different tax rates for physical and digital goods. Let’s start with physical goods. There’s two scenarios. The first and most common one is that you will be charging the VAT rate of your home country. So if you’re based in Germany, for example, and a customer in Spain buys a physical product, you should charge them the German VAT rate. Now, if you’re a large business and you’re doing lots of sales to a specific EU country, you might be surpassing the country’s local VAT threshold. If you’re a German store and your yearly turnover to Spain exceeds 35,000 euros per year, you must register for a local Spanish VAT number. In this case, you will charge the customers in Spain their VAT rate instead of yours, and you also need to display your Spanish VAT number clearly on each order and invoice that you send to the country. These VAT thresholds are different from country to country, but generally range from 35,000 euros to 100,000 euros. You can find out the exact threshold for each country simply by searching “EU VAT thresholds” online. Also, you only need to set up these taxes for countries in the EU, because VAT isn’t charged for orders placed outside of the European Union. Now let’s look at digital goods. When selling digital goods to customers in the European Union, you charge the VAT rate of the customer's country. If your store is based in Germany and a customer from Spain buys a digital product from you, they should be charged with the Spanish VAT rate. Therefore, you will be charging different VAT rates all around Europe based on the countries your customers come from. Now that we’ve gone over the VAT rates for EU consumers, let’s look at businesses from other EU countries. Remember, when selling to businesses with a valid VAT number in other EU countries, you do not charge them VAT. Such customers should be marked as tax exempt in your Shopify store. Sufio allows you to capture and validate EU VAT numbers and automatikally set your business customers as tax exempt. Your customers’ VAT numbers are then displayed on your invoices and, when applicable, taxes are not charged. That leaves us with one last scenario: selling to a country outside the EU. In this case, you simply do not charge VAT to your customer. Alright, now that we’ve looked at how taxes work in the EU, let me show you how to set them up in your Shopify store In order to charge VAT to some customers and not to others, all of your product prices in your store must be set without VAT. This means you will need to exclude taxes from your product prices. So let me open up my Shopify Dashboard and show you how to set this up. Let’s head over to Settings and click on Taxes. Here we have a checkbox that allows you to show all prices with tax included. Make sure this checkbox remains unselected. This way, you’re able to charge VAT to consumers but exempt business customers. Now let’s see how to set up taxes for physical goods. So in your Shopify Dashboard, go to Settings and click on Taxes. You should see a list of all countries in the European Union. If you do not see all EU countries on this list, go to Shipping zones and click on Add shipping zone Under Countries and regions. click on Manage and select all the countries that are currently in the European Union. Now let’s save this shipping zone and head back over to Taxes. Here you must set each EU country’s tax to the VAT rate of your store’s country. To do this, you must click on each country and set its tax rate until all EU countries are marked as “Collecting”. Keep in mind: if you reach the yearly turnover threshold to a certain EU country, you will then charge the customers of that country their VAT rate. Great, Now that we know how to set up our taxes correctly for physical goods, let me show you how simple it is to set up the tax rates for digital goods Once again in your Shopify Dashboard. head over to Settings and then Taxes. Here we have a checkbox that enables you to charge VAT on digital goods. Select it and you’re done. This creates a new product collection where you will put all your digital products. Shopify will then automatikally apply the correct VAT at checkout for your EU customers. Great, we have now set up taxes for both our physical and digital goods. Now keep in mind: when selling to customers throughout the European Union, it is important that you generate valid invoices with detailed VAT breakdowns. These commercial invoices also serve as important export documents when selling goods outside the EU. With Sufio installed in your Shopify store, you can create beautiful invoices tailored to your brand. Invoices include detailed VAT breakdowns and all the necessary information about your business and your customers to make them fully compliant with accounting legislations in the EU. Also, these invoices can be automatikally created in over 30 languages. I really hope this video has helped you guys and if anything still remains unclear, leave a comment right down below and I'll personally get back to you. Thanks for watching. I’m Jan and I'll see you guys in the next video.