The dynamic tax settings are missing something crucial for our clients. In most cases, our merchants want the following setup for international sales:
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Prices are entered including taxes
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When a business outside of the Netherlands orders, no tax should be collected. (This can be done by setting up ‘Don’t collect tax’ for this user)
However, the current Market settings don’t fully support this. Depending on how taxes are displayed, both are insufficient:
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When setting the tax display as dynamic, this changes all prices for this market. Eg: The Netherlands has a 21% tax rate, Germany has 19%. This means all prices are shown different in Germany.
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When setting the tax display as ‘Show as included’, it does not deduct the tax from the price.
What I’d expect, and what worked before is:
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Since the products are added as ‘tax included’, the prices should be the same for each market.
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When the user has ‘don’t collect tax’ set up, the price in checkout should be the base price minus the local tax rate.
I understand this might differ from how taxes work in the US, but in the Netherlands (and generally across the EU), this is the expected behavior.
As far as I know, this can be “worked around” using discounts, but that approach quickly becomes unmanageable when a store sells products with multiple tax rates.
Is Shopify aware of this issue, and are there ways to prevent this?