Considerations for charging duties and import taxes at checkout
Before you collect duties and import taxes in your checkout, review the following considerations.
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Compatibility with checkout customizations
Some checkout customizations might conflict with collecting duties and import taxes at checkout. If you've customized your checkout, then review your customizations before you activate the duties and import taxes feature.
Collecting duties and import taxes in the checkout might conflict with some tax settings.
- Collecting duties and import taxes at checkout isn't compatible with tax overrides or manual tax rates. If you have any tax overrides or manual rates, then they only apply to sales within your region. Overrides and manual rates for international sales are overridden by the duties and import taxes at checkout feature.
- If you activate collecting duties and import taxes at checkout and deactivate it afterwards, then your previous tax settings are restored.
- Collecting duties and import taxes at checkout might affect your tax setup.
- If your store uses registration-based taxes, then taxes such as Value Added Tax (VAT) or sales tax are collected on international orders only if you activate collecting duties and import tax for that country or region. If you need to collect taxes on international orders in that country or region, then you must also activate collecting duties and import taxes at checkout. Tax registrations aren't used if you ship using the delivered duty unpaid (DDU) or delivered at place (DAP) incoterms for such countries or regions.
- If your store uses location-based taxes, then taxes such as VAT or sales tax aren't collected on international orders. Collecting duties and import taxes at checkout isn't compatible with manually entered tax rates.
Collecting duties and import taxes in the checkout has some requirements that might limit your shipping settings or the carrier that you use.
- If your customer pays duties and import taxes at checkout, then ensure that you purchase and use a delivery duty paid (DDP) shipping label to fulfil their order. This ensures that the customer isn't charged duties and import taxes again upon delivery.
- For each country or region, you can choose to use DDP or DAP/DDU. However, you can't offer both DDP and DAP/DDU to customers in the same country or region.
- Shopify Shipping does not support DDP.
- Not all carriers support DDP shipping labels, and some support them for only certain destinations. Contact your shipping carriers to find out if and where they support DDP shipping labels.
- You can't collect duties and import taxes at checkout in the Rest of world shipping zone. To collect duties and import taxes for a country or region, add it to an existing shipping zone or create a new one.
- The Shopify Fulfillment Network app does not support collecting duties and import taxes at checkout.
Duties and import tax estimates
The duties and import taxes collected in the checkout is an estimate of what will be charged by a country or region's tax authority.
- The duties and import taxes that are charged are estimates based on the latest information at the time that the customer places their order. Additional duties might be charged for different reasons, such as incorrect duties paid or incorrect Harmonized System (HS) codes.
- Handling fees and brokerage and disbursement fees aren't included in duties and import tax calculations. If your contract with a carrier does not include waived fees, then consider adding the cost of the fees to your product prices or your shipping rates.
Duties calculation on discounted and free items
Duties and import taxes are determined by a country or region's tax authority based on what the customer pays, not on an item's regular cost. If you collect duties and import taxes on a discounted order, then review your commercial invoice to verify that the correct prices are recorded.
- Duties and import taxes are calculated based on the price the customer pays for an item at checkout. If you sell products at a discount, then verify that your commercial invoice is updated with the discount price for those products, rather than the regular price for the product
- When you offer free products or samples to customers or run a Buy X and Get Y (BOGO) sale, then some items in the shipment have no cost associated with them. For the calculation of duties and import taxes, items can't have a $0 declared value.
- To calculate duties and import taxes for Buy X and Get Y discounts where the second or third item is free, the cost is split evenly across all items. For example, if one shirt is $100 and the second shirt is free, then each shirt is represented as costing $50 to calculate the duties and import taxes.
- When there are free products or samples in the shipment, then the free item is represented as costing $1, and the $1 price is deducted evenly from every other item in the shipment. For example, if a shipment has five items and one of the items is free, then the free item is represented as costing $1, and $.25 is deducted from the price of the other four items in the order.
Countries and regions where charging duties and import taxes at checkout isn't supported
The following countries and regions aren't supported for charging duties and import taxes at checkout. You can't collect duties and import taxes in these regions.
- Republic of Cabo Verde (CV)
- Republic of the Sudan (SD)
- Republic of South Sudan (SS)
- Federal Republic of Somalia (SO)
- South Georgia and the South Sandwich Islands (GS)
- Republic of Iraq (IQ)
- Syrian Arab Republic (SY)
- Democratic Republic of Timor-Leste (East Timor) (TL)
- Turkmenistan (TM)
- Northern Ireland (XI)
- Russian Federation (RUS)
- Federated States of Micronesia (FM)
- Republic of the Marshall Islands (MH)
- Republic of Palau (PW)
- Territorial Collectivity of Saint-Pierre and Miquelon (PM)
- Commonwealth of Puerto Rico (PR)
- Federative Republic of Brazil (BR)
- Falkland Islands (FK)
Collecting only cross-border taxes
When collecting duties and import taxes at checkout is activated, both duties and taxes are charged at checkout. It isn't possible to charge only taxes when the feature is activated. If you need to collect cross-border taxes only, such as in the United Kingdom or the European Union, then don't activate collecting duties and import taxes at checkout.
If your store uses apps for third-party logistics, then verify that your apps and integrations are configured to support charging duties and import taxes at checkout. For example, your apps and integrations need to support the DDP incoterm and apply the correct HS codes to your products.