This guide explains how Shopify’s settings work. It is not tax advice: confirm rates, thresholds and registrations with your accountant or Revenue.
1. Know which rates apply to your products
Ireland has a standard VAT rate of 23%, reduced rates of 13.5% and 9%, and a 0% rate on things like children’s clothes and shoes and printed books. Most stores sell at 23%, but if you sell anything at another rate, those products need their own tax override in Shopify. Otherwise everything is charged at the standard rate.
2. Show prices with VAT included
Irish and EU shoppers expect the price they see to be the price they pay. In Settings → Taxes and duties, turn on the option to include tax in prices. If you sell to several EU countries, Shopify can either keep one VAT-inclusive price everywhere or adjust the price to each country’s VAT rate. Decide which before launch, because it changes your margin per country.
3. Understand the €10,000 EU threshold
Since July 2021, if your total sales to consumers in other EU countries stay under €10,000 a year, you can charge Irish VAT on them. Once you pass €10,000 across all EU countries combined, you must charge the VAT rate of the customer’s country instead.
| Your EU cross-border sales | VAT you charge | Where you report it |
|---|---|---|
| Under €10,000 a year | Irish VAT | Your normal Irish VAT return |
| Over €10,000 a year | The customer’s country’s VAT | The One Stop Shop (OSS) return, through ROS |
4. Register for the One Stop Shop (OSS)
OSS saves you from registering for VAT in every EU country you sell to. You register once through Revenue Online Service (ROS), file one quarterly OSS return covering all EU countries, and Revenue passes the VAT on. In Shopify, add your Irish VAT number, mark that you are registered for OSS, and Shopify starts charging each customer their own country’s rate.
5. Check shipping and discounts
- In Ireland, delivery charges generally follow the VAT rate of the goods. Make sure Shopify is set to charge VAT on shipping rates.
- Discounts reduce the price VAT is calculated on. Test a discount code on a real order and check the VAT on the receipt.
- Gift cards are not taxed when sold; VAT is charged when they are spent on products.
6. Business customers
When you sell to a VAT-registered business in another EU country, the sale is usually zero-rated under the reverse charge: they account for the VAT, not you. To do this you need their VAT number, checked against the EU’s VIES database. Shopify can handle this through its business-customer settings or a VAT-number app, depending on your plan.
7. Northern Ireland and Great Britain
- Northern Ireland still follows EU VAT rules for goods. Sales from Ireland to consumers there are treated like sales to another EU country and count towards the €10,000 threshold.
- Great Britain is outside the EU. For parcels worth £135 or less, you generally need to register for UK VAT and charge it at checkout. Above £135, VAT and any duty are collected at import. Set Great Britain up as its own market in Shopify so prices and taxes are handled separately.
8. Test before you trust it
- Place test orders to Ireland, another EU country and the UK.
- Check the VAT on each receipt matches what your accountant expects.
- Check a product with a reduced rate shows the right amount.
- Download Shopify’s tax report and confirm it has what you need for your returns.