How should we handle VAT / GST on Shopify Partner payouts?

Partner Discussions
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1

Hi everyone,

I build apps for the Shopify App Store and receive monthly payouts from Shopify International Ltd. (Ireland). My tax adviser now tells me the real contractual partners aren’t Shopify at all, but every single merchant who is billed and is paying for the app. The argument (based on § 3a (2) German VAT law, but relevant in any VAT/GST country) is:

  • Shopify’s invoice only shows “Payment”, they forward the money but aren’t the buyer.
  • Because the merchant is the actual buyer, I must charge VAT/GST according to the merchant’s location:
    • 19 % German VAT for German businesses,
    • Reverse-charge for EU businesses with a valid VAT ID,
    • OSS or local rules for non-EU or B2C cases.

This seems to clash with Shopify’s own help page, which implies Shopify itself is the customer and the payout is a B2B service to Ireland (reverse charge, no German VAT).

Questions

  1. Has anyone here been audited or obtained an official ruling that confirms either interpretation?
  2. If you treat each merchant as the customer:
  • How do you get reliable VAT ID / location data when the Partner payout report doesn’t include it?
  • Do you issue separate invoices outside the Shopify system?
  1. Any official Shopify doc or government guidance I’ve missed?

Thanks in advance for sharing your experience!

2

Hey @Pama, I can’t offer specific tax advise, but what I would recommend is to have your tax and legal professionals look over the current partner agreement..

Hopefully some other partners will follow up here with their specific experience.

3

Hey @KyleG-Shopify, thanks for jumping in.

I’ve pored over the Partner Terms, especially section 4 on billing, and I still can’t find anything that clearly says whether Shopify or each merchant is the actual buyer of an app for VAT/GST. The language just makes Shopify sound like a payment middle-man who passes the money along.

Because my VAT treatment depends entirely on who the real buyer is, even one plain sentence in the docs would clear things up. And in Germany that extra 19 % really stings.

Maybe I’m missing something, but for now I’ll hope someone from the EU jumps in and shares how their accountant or auditor handled it.