With VAT-Inclusive pricing, you can seamlessly integrate VAT into your product prices. This approach simplifies the process for your customers by ensuring that the price they see is the price they pay, without any additional VAT added at checkout. This can improve the shopping experience by providing transparency and increasing customer satisfaction.
You can enable VAT-Inclusive Pricing while setting up pricing zones.
What is VAT?
Value-added tax (VAT) is a consumption tax applied to a product at each stage of the supply chain where value is added, from production to the point of sale. Unlike sales tax, which is only charged at the point of sale, VAT is charged as a percentage of the cost at each stage of the production and distribution process. This means that the tax is based on the increase in the value of a product or service at each stage of production or distribution.
VAT in cross-border commerce
In cross-border e-commerce, VAT is important as it ensures that goods and services are taxed in the country where the consumer is located rather than where the seller is based. This helps to level the playing field between domestic and foreign businesses. VAT is usually collected by the seller at the point of sale and then passed on to the government. In some cases, however, it may be collected by the customs authorities at the point of import.
Paying VAT is mandatory for businesses and individuals residing in a country with a VAT system. The VAT rate varies from country to country, and different rates may apply to different types of goods and services within a country. It's important for businesses engaged in cross-border e-commerce to understand the VAT requirements in their target markets to ensure compliance and avoid penalties.
Swap Global simplifies paying VAT by calculating the VAT per country and including it in the pricing of your product.
List of VAT-Supported Countries
Swap Global supports VAT-Inclusive Pricing for customers in the following countries:
⚠️ This list is subject to change.
| Country | VAT Percentage |
|---|---|
| Afghanistan | 10% |
| Albania | 20% |
| Algeria | 19% |
| Andorra | 4.5% |
| Angola | 14% |
| Anguilla | 13% |
| Argentina | 21% |
| Aruba | 4% |
| Austria | 20% |
| Azerbaijan | 18% |
| Bahamas | 12% |
| Bahrain | 5% |
| Bangladesh | 15% |
| Barbados | 17.5% |
| Belarus | 20% |
| Belgium | 21% |
| Bermuda | 0% |
| Bolivia | 14.94% |
| Bosnia and Herzegovina | 17% |
| Brazil | 17% |
| Bulgaria | 20% |
| Cameroon | 19.25% |
| Cape Verde | 15% |
| Chile | 19% |
| China | 13% |
| Colombia | 19% |
| Cook Islands | 15% |
| Costa Rica | 13% |
| Croatia | 25% |
| Curacao (Verde) | 6% |
| Cyprus | 19% |
| Czech Republic | 21% |
| Denmark | 25% |
| Djibouti | 10% |
| Dominica | 15% |
| Dominican Republic | 18% |
| Ecuador | 12% |
| Egypt | 14% |
| Estonia | 22% |
| Ethiopia | 15% |
| Fiji | 9% |
| Finland | 24% |
| France | 20% |
| Germany | 19% |
| Ghana | 15% |
| Gibraltar | 0% |
| Greece | 24% |
| Guam | 2% |
| Guinea | 0% |
| Guyana | 14% |
| Honduras | 15% |
| Hungary | 27% |
| Iceland | 24% |
| Indonesia | 11% |
| Iran | 9% |
| Ireland | 23% |
| Israel | 17% |
| Italy | 22% |
| Jersey | 5% |
| Jordan | 16% |
| Kazakhstan | 12% |
| Kenya | 16% |
| Kosovo | 18% |
| Kuwait | 5% |
| Kyrgyzstan | 12% |
| Latvia | 21% |
| Lebanon | 11% |
| Lithuania | 21% |
| Luxembourg | 17% |
| Macedonia | 18% |
| Madagascar | 20% |
| Malawi | 16.5% |
| Malta | 18% |
| Mauritius | 15% |
| Mexico | 16% |
| Moldova | 20% |
| Monaco | 20% |
| Montenegro | 21% |
| Morocco | 20% |
| Namibia | 15% |
| Nepal | 13% |
| Netherlands | 21% |
| Nigeria | 7.5% |
| Norway | 25% |
| Oman | 5% |
| Panama | 7% |
| Paraguay | 10% |
| Peru | 18% |
| Philippines | 12% |
| Poland | 23% |
| Portugal | 23% |
| Puerto Rico | 11.5% |
| Qatar | 5% |
| Romania | 19% |
| Russian Federation | 20% |
| Sao Tome and Principe | 0% |
| Saudi Arabia | 15% |
| Serbia | 20% |
| Seychelles | 15% |
| Slovakia | 20% |
| Slovenia | 22% |
| South Africa | 15% |
| South Korea | 10% |
| South Sudan | 10% |
| Spain | 21% |
| Sri Lanka | 12% |
| St Lucia | 12.5% |
| Sweden | 25% |
| Switzerland | 8.1% |
| Taiwan | 5% |
| Tanzania | 18% |
| Thailand | 10% |
| Togo | 18% |
| Trinidad and Tobago | 12.5% |
| Tunisia | 19% |
| Turkey | 20% |
| Uganda | 18% |
| Ukraine | 20% |
| United Arab Emirates | 5% |
| United Kingdom | 20% |
| Uruguay | 22% |
| Uzbekistan | 12% |
| Vanuatu | 0% |
| Venezuela | 16% |
| Vietnam | 10% |
| Zambia | 16% |
| Zimbabwe | 15% |
If a country is not yet supported, Swap Global will not calculate VAT. If the country has VAT, it will be calculated at checkout, resulting in non-inclusive pricing in the store.
VAT and Other Price Changes
When VAT-inclusive pricing is enabled for a country, Swap Commerce uses Shopify Markets functionality to set a percentage-based price increase equal to the country's VAT rate for all products sold in that country's storefront. This updates the prices on all product pages and at checkout to include the VAT charged on the item.
Tax & Duties Buffers
Tax & duties buffers are set per shipping zone on the shipping page. The price increase added to products when VAT-inclusive pricing is enabled does not include any tax & duties buffers set. Therefore, the price increase will be for the standard VAT amount. If there is a buffer increase to the amount that should be collected for duties & taxes, the difference will be charged to the customer in the shipping line.
Example
A country has a 10% price coefficient set, and VAT-inclusive enabled with a country VAT of 20%. A product with a base price of 100 will now be 120 due to the 20% VAT included. At checkout, if the VAT collected within the product price is less than the actual amount of VAT calculated at checkout, the difference will be charged at checkout.
⚠️ It is not recommended to use Tax & Duties Buffers when using VAT-Inclusive pricing.
Price Coefficients
Price coefficients are set per pricing zone on the pricing zones page. VAT-inclusive pricing is applied on top of any price coefficients set.
Example
A country has a 10% price coefficient set and VAT-inclusive pricing enabled with a country VAT of 20%. A product with a base price of 100 will now be 132. First, the 10% price coefficient is applied, bringing the product price to 110. Then, a 20% VAT is applied, resulting in a final product price of 132.
Limitations
This feature uses the Shopify Markets functionality to generate country-specific price lists on the merchant’s Shopify store. Whenever a price change is made for a country on the Swap dashboard, an individual Shopify market is created for that country with the requested settings.
Unfortunately, we are limited by the number of Shopify markets that can be made per store (which depends on the Shopify plan). According to Shopify’s Markets documentation, we can add Shopify markets only to stores on the Advanced or Plus plan, with a maximum of 50 markets per store.