Expanding overseas opens up whole new markets and revenue streams, but it also means navigating VAT, GST, and state-by-state sales tax. For Shopify B2B brands, the stakes are even higher. No one wants to be blindsided by unexpected fees or fines just as orders start pouring in from abroad.
At Ecommerce Partners, we've helped dozens of brands move from "domestic only" to "selling worldwide," and we know the tax setup is a big piece of that puzzle.
Below is a concise, step-by-step guide covering why tax compliance matters, plus how to configure VAT for Europe, GST for Canada/Australia, and U.S. sales tax in Shopify. Each section explains when to bring in specialized support, so you can focus on growth instead of surprises.
1. Why Tax Compliance Matters on Shopify B2B
Getting your tax setup right isn't just about ticking a box—it's about providing a smooth checkout experience and avoiding penalties. When taxes display accurately, shoppers trust your brand, and you don't end up with surprise bills or fines later.
Why It Gets Tricky
- Different rules by region: Each country and U.S. state has its own registration thresholds, filing calendars, and rate structures.
- Changing regulations: Tax authorities update rates, thresholds, and documentation requirements frequently.
- Combined fees: In the U.S., you may owe both state and local sales tax. In the EU, you might manage standard, reduced, or zero rates.
- Cross-border nuances: B2B vs. B2C in Europe involves different VAT treatments. In Canada, digital goods may have different rules than physical products.
When to Bring in Professional Help
- You're registering in multiple regions at once.
- You're struggling to keep up with changing rates or rules.
- You need cleaner reporting across regions.
2. VAT (Value-Added Tax) for Shopify B2B Merchants
Basic Setup
- Enable European VAT in your Shopify admin under Settings → Taxes and duties.
- Register for OSS if you exceed €10,000 in annual EU sales to file one VAT return for all EU orders.
Why It Gets Tricky
- Multiple VAT rates by product: Some items have reduced rates; you'll need to override rates per category.
- Zero-rated or exempt transactions: Intra-EU B2B sales with validated VAT ID are zero-rated, but you must collect and store that ID.
- Digital services rules: Software downloads and subscriptions charge VAT based on customer country under MOSS rules.
- Invoicing requirements: Some EU states mandate specific invoice formats that default Shopify invoices may not meet.
- Currency conversions: Exchange-rate fluctuations can change how much VAT you owe each period.
3. GST (Goods and Services Tax) on Shopify B2B
Basic Setup
- Add Canada/Australia under Settings → Taxes in your Shopify store.
- Specify 5% for Canada (or correct HST breakdown) and 10% for Australia.
- Register when required: Canada at CAD 30,000 quarterly sales; Australia at AUD 75,000 annual sales.
Why It Gets Tricky
- Provincial HST complexities (Canada): Some provinces combine GST and provincial tax into one HST rate.
- Digital vs. physical products: Different GST/HST rules apply; e-books and services may be zero-rated or taxed differently.
- Filing calendars differ: Canada may require monthly, quarterly, or annual filings. Australia typically requires quarterly Business Activity Statements.
- Currency conversions impact numbers when pricing in USD but remitting in CAD or AUD.
4. U.S. Sales Tax on Shopify B2B
Basic Setup
- List your nexus states under Settings → Taxes; Shopify will auto-calculate state and local rates.
- Understand nexus triggers: Economic nexus requires registration at $100,000+ annual sales or 200+ transactions per state. Physical nexus occurs with inventory or offices in a state.
Why It Gets Tricky
- Local add-ons vary widely: City, county, and special-district taxes differ significantly by zip code.
- Marketplace facilitator laws: If you use a marketplace or 3PL, clarify who collects and remits tax.
- Multiple filing calendars: Each state has its own frequency based on sales volume.
- Rate updates are constant: States adjust rates mid-year; if Shopify isn't updated, you may under- or over-charge.
- Audit risk: Sales tax audits can reach back several years. Without clean records, you could face unexpected liabilities.
5. Quick-Fire Tips & Key Takeaways
Basic Setup
- Use Shopify's built-in tax settings to toggle region-specific taxes under Settings → Taxes.
- Monitor threshold triggers for EU (€10,000), Canada (CAD 30,000), Australia (AUD 75,000), and U.S. state nexus rules.
Why It Gets Complex
- Cross-region orchestration: Tracking sales simultaneously across EU, Canada, Australia, and multiple U.S. states demands constant attention.
- Data fragmentation: Raw Shopify CSV exports may not easily separate VAT from GST or break down state tax collections.
- Regulation changes: Tax authorities can update rates and compliance rules overnight.
Taking your Shopify B2B store overseas is exciting—new customers, bigger orders, global recognition. But without properly setting up VAT, GST, and U.S. sales tax, you risk expensive penalties and unhappy customers. Shopify's built-in toggles cover basics, but real-world compliance involves multiple rates, exemptions, invoicing rules, and filing calendars. If you're selling in more than one region, professional support can shoulder the complexity so you stay focused on products and growth.
Ready to sell worry-free worldwide? Contact us today for a free tax-compliance review.