Fedev — EU VAT & VIES
Reverse charge on reduced-rate products in Shopify
Fedev — EU VAT & VIES removes the VAT that Shopify actually charged on each line of the order, at the rate Shopify used. A book at 9%, a food item at 7% and a gadget at the standard rate in the same cart each lose their own VAT — no product is stripped at the wrong rate.
Why rates go wrong
A reverse-charge tool that subtracts “the VAT rate” from the order total has to pick one rate. If it picks the standard rate, every reduced-rate product in the cart comes out wrong: the buyer is refunded VAT that was never charged, or charged VAT they do not owe.
How the app avoids it
The app never recomputes tax. When a buyer’s cross-border VAT number is valid, it applies Shopify’s own EU reverse-charge exemption to the customer. Shopify then removes the tax it calculated itself, line by line, using the rates already configured in your store — standard, reduced and zero.
That means:
- No rates to configure in the app, and none to update when a country changes a rate.
- Mixed carts are fine. Each line keeps its own correct treatment.
- What the order shows is what Shopify calculated, so your books and the order agree.
Where to check
Every reverse-charged order lists the tax Shopify applied in your VAT records, so you can see per order what was removed.
Questions
Do I need to set up VAT rates in the app?
No. The app has no rates table. It removes exactly the VAT Shopify calculated with your store's own tax settings, so there is nothing to keep in sync.
Why is the discount on a tax-inclusive reduced-rate product bigger than the VAT line?
Under Shopify's tax-inclusive pricing, the displayed price of a reduced-rate item is derived at the destination's standard rate. When the VAT comes off, the real price drop is therefore larger than the VAT line suggests. That is how Shopify's tax engine works with or without any app installed.
What if a product is zero-rated or exempt already?
Nothing changes for that line — there is no VAT on it to remove.