Setting up tax rates for selling online

You must set the correct tax rates for every region where you sell online.

Add a country to your tax table

To add a country on your tax table, you need to add it as a shipping destination in your store Admin.


When adding a country as a shipping destination you will have the option to set a default federal rate, as well as a default tax rate for regions.

Remove a country from your tax table

To remove a country from your tax table, you must remove it from the Shipping page in your Shopify admin.

If you are using the Rest of world shipping zone, you will still be able to ship to that country using those shipping rates.


If you wish to charge specific shipping rates to another country but can not charge taxes to orders going to that country, set that country's tax rates to 0%.

Include taxes in product prices

Some countries, for example the UK, include sales tax in displayed prices for most types of merchandise.

  1. From your Shopify admin, click Settings, and then click Taxes.

  2. Check the checkbox for All taxes are included in my prices to enable this feature.

    Taxes 1

When this feature is enabled, both you and the customer will still see the relevant taxes as a line item, even though no taxes appear to be added. The subtotal and total will be identical, but the amount of tax you must remit for this order will also be indicated.

Taxes 2


Taxes will be calculated using this formula: Tax = (Tax Rate * Price) / (1 + Tax Rate)

Charge taxes on shipping rates

If your store is outside the United States, then follow these steps to charge taxes on your shipping rates:


For stores in the United States, the Charge taxes on shipping rates option isn't displayed and doesn't need to be checked. The county tax system automatically charges the appropriate taxes on shipping rates.

  1. From your Shopify admin, click Settings, and then click Taxes.

  2. Check Charge taxes on shipping rates:

    Taxes 3
  3. Click Save.

Avoid charging duplicate taxes

If your customers seem to be getting charged taxes twice, you likely have the sub-region taxes configured, and they are being added to the total tax for the country in question.

To avoid charging taxes twice, take care when you set a tax rate for a country and its sub-regions:

  1. From your Shopify admin, click Settings, and then click Taxes.

  2. In the "Tax Rates" section, click on the country's name.

  3. Taxes will be shown for the country and for the sub-regions (state or province level). Your customer's total tax is a compilation of any tax values in the sub-region's area, plus the overall tax of an order.

    Tax rates

Use the drop-down menu under the sub-region tax rate to tell Shopify how you want to charge taxes.

Tax rates 2

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