Prices include VAT and are adjusted to the VAT rate of the country of delivery

Under Webshop → General, you can specify whether the prices you enter for your products include or exclude sales tax. If you enter prices including VAT, you can also choose to have the price adjusted to reflect the VAT rate in the country to which the item is being shipped. For example, if Norway is set to 0% VAT, a customer in Norway will pay the price excluding VAT.

How to select prices including VAT

1. Go to Webshop → General
2. Check the box next to "Prices for products in the admin panel include VAT"
3. Click Save

This setting determines whether the prices you enter for products in the admin panel include or exclude VAT, and therefore affects the prices customers see in the store. You can see which option is selected by the field labels on the product: "Suggested price incl. tax" or "Suggested price excl. tax."

Whether this option is checked by default depends on how the store was set up. New stores created through shoporama.dk start with prices including VAT, while an additional online store you add under Company → Online Stores starts with prices excluding VAT. Therefore, check the checkbox before you start entering prices.

This setting applies only to the prices you enter. To find out whether the sales figures in the admin panel include or exclude VAT, see “Are the figures in the backend inclusive or exclusive of VAT?”

When you switch, the prices are not recalculated

Checking the box does not change the numbers you’ve entered—only what they mean. If you’ve entered 100 DKK excluding VAT, a Danish customer pays 125 DKK. If you check the box afterward, it still says 100 DKK in the admin panel, but now that’s the price including VAT, and the customer pays 100 DKK. If you uncheck the box, the opposite happens, and customers’ prices increase by the amount of the tax. If you’re switching to a store that already has products, you must therefore adjust the prices immediately, for example, via a CSV import. Also remember special offer prices, variant prices, tiered and volume discounts, customer group prices, “Fixed Price” promotions, and the products’ own shipping costs. These are affected in the same way.

Adjust prices to the destination country’s VAT rate

When your prices include VAT, the price is the same in all countries. Shoporama only calculates the portion of the price that is VAT based on the delivery country’s rate. If you sell an item for 125 DKK to a customer in Norway, and Norway has a 0% VAT rate, the customer will therefore pay 125 DKK, and the VAT on the order is 0 DKK. The customer thus pays the Danish price including VAT, but there is no VAT on the order, and you keep the 25 DKK.

When the “Adjust prices to the destination country’s VAT” checkbox is selected, Shoporama deducts your own VAT from the price and adds the destination country’s VAT instead. In this case, the customer in Norway pays 100 kr. This option is turned off by default, and as long as it remains off, prices are calculated as before.

Here’s how to enable it

This adjustment applies only to stores that enter prices including VAT. If the “Product prices in the admin panel include VAT” checkbox is not selected, your prices are exclusive of VAT. In that case, the destination country’s VAT is already added to the price, and the adjustment makes no difference. Don’t check that box just to use the adjustment, because then all your prices will change (see “When you make changes, prices aren’t recalculated” above).

1. Go to Shipping → Countries, and check that the B2C VAT is set to the correct rate for all the countries you sell to, including your default country (see “Check the VAT rates for your countries” below)
2. Go to Webstore → General
3. Make sure the box next to “Prices for products in the admin panel include VAT” is already checked. The adjustment only works in conjunction with this setting
4. Check the box next to “Adjust prices to the delivery country’s VAT” right below
5. Click Save

When you save, the store’s cache is automatically cleared, so it may take a moment before all pages display the new prices.

How the price is calculated

Your own VAT rate is the B2C VAT rate for your default country—that is, the country with a checkmark in the “Default country” field under Shipping → Countries. It is not the “Country” field under Webshop → General that determines this. When shipping to a country with a different VAT rate, your VAT is subtracted, and the destination country’s VAT is added. With 25% Danish VAT, the price is divided by 1.25 and then multiplied by, for example, 1.19 if the destination country’s VAT is 19%.

Here’s how it works for an item priced at 125 DKK, with the countries set to the rates shown in parentheses:

• Denmark (25%): 125 DKK, of which 25 DKK is VAT. The same as without checking the box.
• Norway (0%): 125 ÷ 1.25 = 100 DKK with 0 DKK in VAT. Without checking the box, the customer pays 125 DKK.
• Germany (19%): 125 ÷ 1.25 × 1.19 = 119 DKK, of which 19 DKK is VAT. Without checking the box, the customer pays 125 kr., of which 19.96 kr. is VAT.

If the VAT rate in the country of delivery is higher than your own, the price increases accordingly. At 27%, 125 DKK becomes 127 DKK.

It will be adjusted

• Regular price and sale price
• Variant prices
• Tiered discounts and volume discounts
• Customer group prices
• Fixed-price promotions
• The product’s own shipping cost, i.e., the “Shipping with VAT ” field on the product
• The previous price, i.e., the lowest price in the last 30 days (read more in Price History and the Omnibus Directive)
• Exchanges, both when the customer exchanges the item themselves and when you approve an exchange in the Returns Center. The new item is priced the same way as the original order, even if you’ve disabled the setting on the page. Orders placed before you enabled the setting are exchanged without any price adjustment.
• Items with a VAT category, such as books. Here, the category’s rate in your default country and in the delivery country is used instead of the countries’ standard VAT rates. If books are subject to 25% VAT in Denmark and 7% in Germany, a book priced at 125 DKK will therefore cost 125 ÷ 1.25 × 1.07 = 107 DKK in Germany. However, a “Fixed Price ” promotion is adjusted using the countries’ standard VAT rates, even when it applies to items with a VAT category. Read more in VAT Categories.

Percentage discounts are applied automatically because they are calculated based on the adjusted price. This applies, for example, to campaigns with percentage discounts and discount codes offering a percentage discount. The shopping cart, order, payment, and order confirmation use the adjusted price, and the VAT on the order is calculated based on the rate in the country of delivery (for products with a VAT category, the category’s rate in that country).

The following are not adjusted

• Products with an “Old VAT Rate” in the “Law, VAT, Customs, and Environment” tab. As before, they have the same price in all countries. However, if they are part of a “Fixed Price” promotion, the promotional price will be adjusted. Instead, select a VAT category for the product, and the price will also be adjusted.
• Products that issue a gift card (the “Gift Certificate” checkbox is selected in the “Credit, etc.” tab). The customer pays the same price in all countries and receives a gift card for the full amount.
• Shipping rates under Delivery → Shipping Rates and Delivery → Weight-Based Rates. These are always entered without VAT, and the destination country’s VAT is added as before.
• Fixed amounts: Discount amounts and minimum amounts for discount codes, “Free shipping over,” campaign thresholds, and deposits. These are not converted, so a customer in a country with a lower VAT rate must add more items to the cart before a threshold is reached. You can set the “Free shipping over” threshold for each country under Shipping → Countries if the threshold should be different for a specific country.
• Subscription prices. This setting does not change how they are calculated.
• Product feeds, such as Google Shopping and Pricerunner. They always display prices from your default country.
• Orders you create in the admin panel and items you add to an order in the admin panel. They are priced as before based on your default country, even when the order is shipped to a different country.

When does the customer see the customized price?

As soon as Shoporama knows the delivery country. This happens when the customer selects a country at checkout (in some themes, this happens as early as the shopping cart), or when the customer is logged in and has an address in that country. Until then, the store displays prices from your default country. Shoporama does not guess the country based on the customer’s location.

Once the country is known, product pages, categories, the shopping cart, and the checkout page display prices for that country—including for items already in the shopping cart. A new customer from Norway will therefore see your Danish prices on the product pages until Norway is selected, at which point the price will drop.

Business customers with a VAT number

Each country has both a B2B VAT rate for business customers and a B2C VAT rate for private customers. Which rate applies to a company depends on whether the “Validate VAT Numbers Against VIES (EU)” checkbox is selected, which is also located under Webshop → General:

• With VIES validation, the price follows the country’s B2B VAT rate when a company in another EU country has a valid VAT number. If the B2B VAT rate is 0%, the company pays the price excluding VAT, e.g., 100 kr. for an item priced at 125 kr.
• Without VIES validation, a company with a VAT number pays the same price as a private customer in that country, while the VAT on the order remains at the B2B VAT rate as before. For example, if Germany has a B2C VAT rate of 19% and a B2B VAT rate of 0%, the company pays 119 DKK with 0 DKK in VAT.
• Companies outside the EU, such as in Norway, cannot be verified in VIES. They pay the same price as a private customer in the country.

If a company in another EU country is to pay the price based on that country’s B2B VAT rate, “Validate VAT Numbers Against VIES (EU) ” must be enabled.

With VIES validation, the VAT number is checked when the customer enters their address at checkout, so a business customer first sees the price excluding VAT after that step. Read more in Reverse Charge and VIES Validation.

Check the VAT rates for your countries

This setting uses the rates listed for your countries under Shipping → Countries. Review them before enabling this feature:

• If B2C VAT is set to 0 for a country, customers in that country will pay the price excluding your VAT. This is correct if the country’s rate should be 0%, but not if the rate has never been entered.
• If B2C VAT is set to 0 for your default country, prices will not be adjusted at all, and you’ll receive a message under Notifications (the clock at the top of the admin panel) until the rate is corrected.
• A new country is created with 0% for both B2B VAT and B2C VAT. This also applies to countries created automatically when you import customers. Correct the B2B VAT (%) and B2C VAT (%) on the country’s edit page.

The rate a country should have depends on your sales and your VAT registration, so ask your accountant if you’re unsure. Read more about countries and VAT rates in Countries and Currencies.

Three ways to set prices

• Prices including VAT without adjustment: the price is the same in all countries. A customer in Norway pays 125 kr. with 0 kr. in VAT.
• Prices including VAT with adjustment: Your price applies in your default country; in other countries, your VAT is deducted and the country’s own VAT is added. A customer in Norway pays 100 DKK.
• Prices excluding VAT: The delivery country’s VAT is always added to the price you enter. If you enter 100 DKK, a customer in Denmark pays 125 DKK, and a customer in Norway pays 100 DKK. In this case, the “Adjust prices to the delivery country’s VAT” setting makes no difference.

With prices including VAT, you determine the price your Danish customers see—for example, 99.95 kr. With this adjustment, you keep that price while ensuring that customers in countries with a different VAT rate do not pay your Danish VAT.

Frequently Asked Questions

Will my Danish customers continue to pay the same amount if I enable this feature?

Yes. Customers in your default country will pay the same as they do today because the price already includes your own VAT. This also applies to customers in other countries with the same VAT rate as yours. Only countries with a different rate will see a different price. For products with a VAT category, the category’s rate applies. A book priced at 125 DKK will therefore cost 125 ÷ 1.25 × 1.06 = 106 DKK in Sweden, even though Sweden and Denmark both have a 25% VAT rate.

Does changing this setting affect the prices I’ve entered in the admin panel?

No. Your prices remain unchanged in the admin panel. The conversion only takes place when the price is displayed to a customer in a country with a different VAT rate. If you uncheck the box again, the store will display the same prices as before.

Can a Danish customer get the lower price by selecting Norway?

The price is based on the delivery country the customer selects at checkout. If the customer selects Norway, Norway will be listed as the delivery country on the order along with the shipping address, and the customer will see the shipping options and shipping cost for Norway. If the address does not match the country, contact the customer before shipping the item.

Will orders that have already been placed be recalculated if I enable this feature in the middle of the month?

No. The price and sales tax are saved on the order when the customer makes the purchase and are not changed afterward. The setting applies to purchases made after you save it. This also applies to exchanges: an item from an order placed before you enabled the setting is exchanged without adjustment, and an item from an order placed with the setting enabled is exchanged with the adjusted price, even if you disable the setting again.

My prices end in 99 kr. Will the Norwegian price be an odd amount?

Yes, usually. The price is rounded to the nearest øre, not to the nearest krone. If Norway is set to 0% VAT, an item priced at 99 kr. costs 79.20 kr. in Norway, and an item priced at 99.95 kr. costs 79.96 kr.

How can my accountant see that Danish VAT has been deducted and the destination country’s VAT has been added?

The conversion isn’t listed as a separate line item. The order shows the price the customer paid and the VAT calculated at the destination country’s rate. On the order in the admin panel, you’ll see for each item : Unit price incl. VAT, Excl. VAT, and VAT per unit. Your accountant can recalculate the price based on your price and the two VAT rates, as in the example above.

Do sales to Norway and Germany show the correct VAT and net amount?

The order is saved with the price and VAT at the rate specified for the country of delivery. Using the rates from the example above, the net amount for an item priced at 125 DKK is therefore 100 DKK, regardless of whether it is shipped to Denmark, Norway, or Germany. You should check with your accountant to confirm that the rates for your countries are correct and to determine how to report international sales.

Need help? Contact us at support@shoporama.dk.