Introduction
This article explains how to correctly configure tax settings in Shopify when integrating with TRAEDE. Tax configuration is extremely important, and failing to set it up from the start can result in incorrect VAT being applied to orders, incorrect accounting entries, and difficult cleanup later.
This guide is relevant for all TRAEDE users running B2C sales through Shopify.
Why tax setup matters
Shopify is the source of truth for VAT when importing orders into TRAEDE.
If taxes are not configured correctly in Shopify:
Orders will have incorrect VAT
TRAEDE will import these incorrect VAT amounts
Your accounting system will receive incorrect VAT data
Fixing this later is significantly harder than configuring it correctly from the start.
We highly recommend completing this setup on all your Shopify stores.
Step 1: Activate “All prices include tax”
Go to Settings → Taxes and duties in Shopify and enable:
All prices include tax
This must be activated because TRAEDE assumes that RRP includes VAT.
If Shopify is not configured the same way, prices will not match between the systems.
To learn more, see the TRAEDE guide: Introduction to prices and price synchronization.
Step 2: Charge tax on shipping
Enable:
Charge tax on shipping rates
There is a common misconception that shipping should not include VAT.
This is incorrect—shipping always includes VAT unless local rules explicitly specify otherwise.
Make sure this setting is activated.
Step 3: Configure EU VAT (One Stop Shop)
Open the European Union section in Shopify’s tax settings.
You must determine:
Whether you are below the One Stop Shop threshold
Or above the threshold (most brands are)
If you sell more than €10,000 annually to EU countries outside your home country, you are part of OSS (One Stop Shop).
If you are part of OSS:
Select Collect VAT
Choose One Stop Shop (OSS)
Enter your OSS VAT number
Shopify will then automatically calculate the correct VAT rates for each EU country.
If you are below the threshold, select:
Micro-business exemption
Step 4: Country-specific VAT registrations
If you are VAT registered in non-EU countries, such as:
Norway
Switzerland
United Kingdom
You must add country-specific VAT registration entries in Shopify.
This ensures Shopify charges the correct VAT in those markets.
Step 5: Shopify controls VAT — TRAEDE follows
When TRAEDE imports a Shopify order, TRAEDE:
Reads the VAT applied by Shopify
Applies the same VAT inside TRAEDE
Sends this VAT to your accounting system
This means Shopify must be correct first, or the incorrect VAT will cascade into TRAEDE and your accounting.
Step 6: Ensure “Charge tax on this variant” is active in TRAEDE
In TRAEDE, every variant has an option:
Charge tax on this variant
This should always be active.
If it is deactivated:
Shopify will not calculate tax on that variant
VAT will be incorrect
Accounting exports will also be incorrect
TRADE activates this by default, but some users accidentally deactivate it.
Do not change this unless instructed by TRAEDE support.