- Short answer
- Set Dynamic tax display on each market in Markets; it shows local tax only where you collect it and never changes shipping.
- Shopify's example
- 10% home rate, $100 at home: $109.09 in the U.K. at 20% VAT
- Not adjusted
- Shipping rates and prices you fixed per region
- Storefront caveat
- Product pages and cart can be wrong unless you use local currencies with Shopify Payments; eligible repeat visits show correctly
Where do you set Dynamic tax display?
Dynamic tax-inclusive pricing works market by market, and local tax shows only where you've set up tax collection, so first add a tax registration for the market's regions.
- Go to Markets and open the market.
- On the Taxes and duties row, click Add customization if the market inherits its settings.
- Open Tax display and select Dynamic tax display.
- Click Done, then click Save.
- Markets
- Market name
- Taxes and duties
- Tax display
The store-wide Include sales tax in product price and shipping rate toggle in Settings › Taxes and duties is separate; Shopify says the two “can be used individually or together”.
- Settings
- Taxes and duties
What will customers in each country pay?
Where you collect tax, Shopify includes local tax automatically only in countries and regions on its dynamic-pricing list; all others see prices without tax.
If your prices include tax, Shopify first removes your home tax rate, set by your store address, when you sell to a country or region with a different rate or tax-exclusive prices. In its example, $100 at a 10% home rate is $90.91 plus $9.09 tax. Then:
- United Kingdom, 20% VAT: $109.09 in the store and at checkout.
- California: $90.91 in the store, local tax added at checkout.
- A region where you don't have to charge tax: $90.91 in the store and at checkout.
Shipping rates don't change, and Shopify's changelog says dynamic tax-inclusive pricing “only affects cross-border sales”.
What should you check before you switch it on?
- Fixed market prices aren't adjusted.
- Product pages and cart show correct prices only if you sell in local currencies with Shopify Payments, or on later visits if shoppers bought with an address in an eligible region, have cookies on, haven't cleared their cache and don't browse incognito; checkout shows correct prices.
- Post-purchase upsell apps: dynamic tax-inclusive pricing isn't supported on stores using third-party ones, and Shopify's page on including taxes in prices says the same of accelerated checkout buttons.
- Tax overrides: Shopify says both that they won't be recognized and that one for international sales can raise the charge, so review overrides you use abroad.
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