- Short answer
- With Shopify Tax or Basic Tax, 8 regions tax shipping where applicable; elsewhere the Charge tax on shipping rates checkbox decides.
- The setting
- Settings > Taxes and duties > Global settings > Charge tax on shipping rates.
- Its default
- No Help Center tax page we read on October 10, 2026 says whether it starts selected; check your admin.
- EU and UK rate
- Mixed VAT rates in one order on Shopify Tax: shipping tax follows the proportion of each rate.
- From October 23, 2026
- Orders to US addresses on Shopify Tax or Tax Platform: return shipping fees taxed where taxable, not on tax-exempt orders.
- Not tax advice
- Whether shipping is taxable varies by country and tax jurisdiction; confirm yours with the tax authority or a professional.
Who decides whether shipping is taxed: Shopify or you?
On Shopify Tax or Basic Tax, shipping is taxed where applicable in 8 countries and regions regardless of the Charge tax on shipping rates setting. India is not among them; see GST on shipping in India.
| Your setup | What decides | Where to act |
|---|---|---|
| Australia, Canada, EU, New Zealand, Norway, Switzerland, UK or US, on Shopify Tax or Basic Tax | Shopify, where applicable | Rates and overrides |
| US exception: registered in California, Colorado, Florida, Illinois, Louisiana, Maine or Maryland | You: When applicable (default), Always or Never | Advanced options > Shipping tax |
| Any other country or region, on Shopify Tax or Basic Tax | Charge tax on shipping rates | Settings > Taxes and duties > Global settings |
| Any region, on Manual Tax | You: no automatic calculation | Shipping tax rates, per region |
What rate does Shopify use for tax on shipping?
Not always your standard rate:
- Mixed VAT rates (EU and UK, on Shopify Tax): shipping tax follows the proportion of each VAT rate in the order, so it can seem different from your standard rate.
- Product tax overrides (EU and UK): shipping for those products takes the country's standard VAT rate, not the override rate.
- Shipping overrides: a separate shipping override sets the rate on shipping through its Tax rate field.
Is a return shipping fee taxed too?
Starting October 23, 2026 (still ahead as of October 10, 2026), tax will be calculated on return shipping fees for orders shipped to US addresses if you use Shopify Tax or Tax Platform (not Manual Tax or Basic Tax), and only where the fee is taxable in the destination's tax jurisdiction; tax-exempt orders are excluded. If you've set shipping to be untaxed in a state, return shipping fees in that state remain untaxed.
For the fee itself, see who pays for the return trip.
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