1/23/2025

Shopify Solution for Collecting Duties & Taxes on International Sales

Selling internationally can be an exciting avenue for business growth. However, navigating the complexities of import duties and taxes is often a daunting task for merchants. Thankfully, with Shopify's innovative solutions, managing these international duties & taxes has never been easier. This blog post delves into the various aspects of the Shopify platform designed to facilitate international sales, ensuring compliance & a smooth shopping experience for your customers.

Understanding Duties & Import Taxes

Before we dive into the specifics of Shopify's solutions, it’s essential to understand what import duties and taxes are. Import duties refer to the fees imposed by governments for goods brought into the country. These fees can include tariffs, value-added tax (VAT), and excise taxes, which collectively impact the total cost of imported products. Merchants who are aware of these costs can price their items more accurately while complying with regulations.

Why is Collecting Duties & Taxes Important?

Collecting duties & import taxes is NOT just a legal requirement; it significantly impacts your business's bottom line. Here’s why:

Customer Clarity: Favoring a transparent pricing model by including estimated duties & taxes at checkout reduces surprises for international shoppers.
Lower Rate of Parcel Refusals: Confusion related to additional charges often leads to customers rejecting parcels, costing merchants both time and money.
Improved Customer Satisfaction: Clear communication about costs results in a better overall experience, leading to higher customer lifetime value.

Shopify’s Duties & Import Taxes Feature

In March 2022, Shopify launched a groundbreaking feature known as the Duties & Import Taxes calculator integrated into its Shopify Markets global commerce solution. Here’s how it works:

Automated Calculations: As an online merchant, you no longer have to manually calculate duties & taxes for international customers. This feature automatically calculates and presents the total cost at checkout based on the customer’s shipping address and the items in their cart.
- Want to check this out for yourself? Simply head to your Shopify Dashboard and enable the Duties & Import Taxes feature in your settings.
- For more information, you can read the Shopify blog on Duties & Taxes.
Delivery Duties Paid (DDP): Shopify recommends using DDP shipping terms to simplify the international buying experience. This means that as a merchant, you take responsibility for covering duties and taxes—eliminating unexpected costs for your customers. You charge these estimated duties at the point of sale, leading to fewer parcel refusals and chargebacks.
Easy Setup: Setting up this feature is straightforward. Simply consult with your 3PL (Third Party Logistics) rep or carrier, and ensure your shipping app integrates seamlessly for DDP shipping options.

Getting Started with Shopify’s Duties & Import Taxes Feature

Here are some quick tips to get you off on the right foot with Shopify’s duties & import taxes feature:

Verify Product Information: Make sure you have the correct product information listed, including the Harmonized System (HS) codes for accurate duties calculations. Shopify allows you to upload these codes in bulk via CSV files directly in your Shopify admin.
Configure Shipping Rates: Discuss shipping options with your carrier, ensuring that any applicable disbursement fees are included in your pricing model. You can negotiate these fees and implement them into your shipping rates for a seamless customer experience.
Stay Informed on Regional Regulations: By brushing up on regional tax thresholds and duties, you ensure compliance while maximizing your ability to price competitively. Some countries may even have de minimis thresholds, meaning lower duty levels for lower-value shipments.

Enhancing Your Global Sales Strategy

Adopting the Duties & Import Taxes feature is just the beginning. Here are some additional strategies to optimize your international selling efforts on Shopify:

Leverage Shopify Tax: Effective integration of Shopify Tax helps automate the sales tax process without the strain of manual updates. This integration ensures collection accuracy across various jurisdictions, providing real-time insights on your liabilities and obligations.
Consider App Options: Using specialized apps like Zonos makes it easy to calculate, collect, and remit duties & taxes directly through Shopify, all while ensuring your customers are informed about their total costs upfront.
Use Analytics for Insights: By analyzing customer data and purchase patterns, you can adjust your pricing strategies, optimize shipping methods, and tailor your offerings to meet customer demands in different markets. This leads to better product-matching and enhances customer loyalty.

Customer Communication About Duties & Taxes

Keeping customers informed about duties & taxes can enhance their shopping experience. Here are some actionable strategies:

Custom Notifications at Checkout: Use a custom note or disclaimer during checkout explaining that additional taxes and duties may apply, depending on their location. This sets realistic expectations for the customer.
FAQ Section: Consider adding an FAQ page addressing common inquiries about international duties & taxes. This can clear up confusion for many customers.
Calcurates App: If you’re looking for a tool that specifically handles estimated duties & taxes for your international shipments, the Calcurates app could be the answer. It allows merchants to provide upfront information regarding any duties at checkout, which helps customers prepare for potential additional costs before they finalize their orders.

Final Thoughts: Boosting Your International Sales with Shopify

By taking full advantage of the tools and features Shopify provides, you can turn the challenge of collecting international duties & taxes into a streamlined process. Your international customers will undoubtedly appreciate the transparency & clarity you provide them during checkout.

At Arsturn, we believe that engaging your customers go hand-in-hand with streamlined operations. By creating a custom chatbot using Arsturn, you can further enhance your customer engagement strategies! Our AI chatbot solutions help answer FAQs, provide crucial information about duties & taxes, and ultimately DRIVE conversions by improving the overall customer experience.

So, why not give it a go? Start exploring how you can easily implement a custom chatbot on your Shopify store today. INSTANLY create bespoke experiences that keep your customers informed & satisfied!

Get started with Arsturn—Claim your AI Chatbot now. It’s free to try, so why not engage your audience like never before?

Whether you're venturing into international waters or enhancing your local market strategy, Shopify has the tools you need to succeed—and remember, you don’t have to do it alone.