Skip to main content

Shopify Managed Markets: Why Was Import Tax Not Withheld for an Order?

Bookkeep has encountered instances where Shopify Managed Markets orders did not have import taxes withheld, leading to higher-than-expected payouts. After investigating, Bookkeep learned the following from Shopify regarding these situations:

How Shopify Managed Markets Handles Taxes and Duties​

Shopify Managed Markets manages the calculation, collection, and remittance of taxes and duties for Managed Markets orders. However, this only applies if you follow the approved shipping instructions and use supported carriers.

Using Unsupported Carriers​

If you ship an order using an unsupported carrier, import taxes and duties are paid out to you directly. In this case, you are responsible for handling the charges with your carrier. Depending on the shipping method:

  • DDP (Delivered Duty Paid): You will pay the charges directly to the carrier.
  • DDU (Delivered Duty Unpaid): The customer may be charged upon delivery, and you would need to refund them if required.

When using an external carrier, Shopify partners cannot assist with customs or shipping issues since the order is processed outside the Managed Markets system.

Low-Value Goods (LVG) Sales Tax​

For orders that include low-value goods sales tax (LVG), such as EU orders below the €150 threshold, Shopify will still deduct and remit the VAT to the relevant tax authority, regardless of the shipping method. The key difference is that import taxes and duties will be paid to you when using an unsupported carrier, as these charges are handled by the carrier, not the tax authority.

Best Practices for Shipping with Shopify Managed Markets​

To ensure that import taxes and duties are paid on your behalf and that Shopify can assist with shipping issues, be sure to follow Shopify's outlined steps for shipping Managed Markets orders and use only supported carriers.

For detailed instructions, visit the Shopify Help Center - Managed Markets Shipping.