Setting up your Shopify store to keep up with UAE tax requirements is an important step towards ensuring that your e-commerce business functions smoothly and lawfully. Moreover, In 2018, the UAE imposed a standard value-added tax (VAT) of 5% on most products and services. As a Shopify store owner, you must ensure that your site is properly structured to collect and remit VAT, preventing legal complications and offering transparency to your consumers.

In this blog, we’ll walk you through the steps to set up UAE taxes in your Shopify store, ensuring that you’re compliant with local tax laws.

How to Set Up Tax on Shopify: A Guide

Understanding VAT in the UAE

• VAT Rate: The UAE’s standard VAT rate is 5%. Certain items and services may be excluded or subject to a different rate, so be sure you understand what applies to your products.

• Registration Threshold: Businesses with taxable supplies exceeding AED 375,000 annually must register for VAT. Voluntary registration is available for businesses with supplies and imports exceeding AED 187,500.

• Filing and Payment: VAT returns must be submitted quarterly (or monthly for some enterprises) via the Federal Tax Authority (FTA) site.

Setting Up Taxes in Shopify

Once you’re familiar with the basics, you can proceed to set up VAT in your Shopify store by following these steps:

Log in to Your Shopify Admin: Start by logging into your Shopify admin dashboard. This is where you’ll manage all aspects of your store, including taxes

Navigate to the Taxes Section: In your Shopify admin, go to Settings > Taxes & Duties. Here, you’ll find options to configure taxes for different regions, including the UAE.

Set Your Tax Region: Under the Countries/Regions section, add the United Arab Emirates as a tax region. Shopify may automatically recognize the UAE’s standard VAT rate, but it’s always good to double-check.

Enter the VAT Rate: Ensure that the VAT rate is set at 5%. If Shopify has not automatically populated this, you can manually enter it.

Include or Exclude Tax in Prices: Shopify lets you select whether to show pricing with or without VAT. You can select your preference under Show all prices with tax included. If you cater mainly to customers in the UAE, including VAT in the displayed price can make the shopping experience clearer for your customers.

Set Up Tax Overrides (if necessary): If you sell products that are exempt from VAT or have a different tax rate, you can set up tax overrides. Navigate to Products > Collections and select the collection you want to apply the override to, then specify the tax rate.

Check Your Tax Invoices: Shopify automatically generates tax invoices for your orders. However, it’s important to ensure that these invoices meet UAE regulations. They should include your Tax Registration Number (TRN), the VAT amount, and other required details. You may need to customize your invoice template in Shopify to include this information.

Test Your Setup: Before going live, it’s advisable to place a test order to ensure that the tax is calculated correctly and that the invoice displays all the necessary information.

 Filing and Remitting VAT

After successfully setting up VAT in your Shopify store, you’ll need to keep track of your tax responsibilities.

• Record Keeping: Maintain accurate records of all sales, tax collected, and expenses. Shopify’s reporting features can help you track this data.

• File VAT Returns: Submit your VAT returns and payments through the FTA portal on time. Late submissions can result in penalties.

• Look for specialist Help: If you’re confused about any part of VAT registration or filing, speak with a tax specialist or an ecommerce development company in the UAE.

Conclusion

Setting up UAE taxes in your Shopify store is an essential step in ensuring compliance with local regulations. By following the steps outlined above, you can confidently manage VAT within your online store, providing a seamless shopping experience for your customers while staying within the legal framework.

If you are new to Shopify or need help with the setup process, be sure to contact e-commerce companies in the UAE. Our professionals specialize in e-commerce solutions and can assist you with configuring your business, ensuring that everything is correctly set up, and remaining compliant with local regulations.

Contact Us to Learn more

https://www.expertsinshopify.com/contact.html