Collecting international duties and import taxes at checkout

To collect duties and import taxes in your store's checkout, your store needs to meet the following requirements:

• If your store uses shipping labels, then you must use a shipping carrier that supports DDP labels.
• Does not use Shopify Fulfillment Network.
• Has Harmonized System (HS) codes applied to products.

If your store doesn't meet the requirements to charge duties and import taxes at checkout, then you can use a third-party app to calculate duties and import taxes.

Transaction fee costs for calculating duties and import tax

A transaction fee applies to orders that have duties and import taxes calculated. When the temporary lowered fee isn't in effect, the following fees are charged for calculating duties and import taxes:

• A 0.85% transaction fee applies to orders that have duties and import taxes calculated at checkout in stores that use Shopify Payments as their gateway. The 0.85% transaction fee also applies to orders that use a third-party payment provider, such as PayPal, as long as Shopify Payments is the primary gateway.
• A 1.5% transaction fee applies to orders that have duties and import taxes calculated at checkout in stores that use other payment providers as their gateway. The 1.5% transaction fee also applies to stores that use Shop Pay as an accelerated checkout if Shopify Payments isn't the primary gateway.

The transaction fee is applied for every order that has duties and import taxes calculated at checkout, even if the calculated amount is zero. Transaction fees aren't charged in the following cases:

• Orders that are shipped to the same country or region as where the store is located.
• Orders that are shipped between EU member countries.
• Abandoned checkouts.

Collect duties and import taxes at checkout

When you activate collecting duties and import taxes at checkout, duties and import taxes are charged on international orders. Orders that are placed from regions where you have a fulfillment location aren't affected.

Steps:

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Duties and import taxes section, click Set up.

3. Confirm that your shipping carriers and third-party integrations support delivered duty paid (DDP).

4. Select the shipping countries or regions where you want to collect duties and import taxes at checkout.

5. Review products that have been flagged as missing HS codes and a country or region of origin and add the missing information to ensure that duties and import taxes are calculated accurately.

6. Confirm that you've updated your store policy and notifications for international sales.

7. Review the terms and conditions for calculating duties and international taxes at checkout.

8. Click Agree and activate.

When the duties and import taxes at checkout setup is complete, review the additional tasks to complete to set up your store for international sales.

Review charges for duties and import taxes

After you set up the collection of duties and import taxes, you can review a summary of charges on every order that has duties and import taxes applied, even if that amount is $0. The summary contains the following information:

• Applicable Harmonized System (HS) codes, duty rates, duty name, and calculated duty amount for each item in the order
• Whether preferential treaties have been applied to the order
• Whether the order was above de minimis

Steps:

1. From your Shopify admin, go to Orders.

2. Click an order that has duties and import taxes applied.

3. In the Duties section, click the amount of duties and import taxes.

Set duties and taxes for specific markets in Markets

For each market, you can select whether duties and import taxes are charged for that market and set how taxes and duties are displayed to your customers in the checkout.

If your store is on the Plus plan and you use B2B with Markets, then you can deactivate duties and taxes for a B2B parent market and have your setting carry over to your B2B submarkets, or manage each market individually by using the following steps.

Steps:

1. From your Shopify admin, go to Markets.

2. Click the market that you want to customize.

3. Click the + icon next to Taxes and duties. A preview is generated to provide an example of what's displayed to your customers at checkout.

4. Activate the Collect duties and import tax option to collect taxes and duties for that market. By default, your collection is set to Dynamic tax display and Show as line item.

5. Optional: Change your duties and import taxes settings:

   1. Select how taxes are displayed for your customers:
      • To automatically localize taxes based on the customer's region, select Dynamic tax display. When the country expects tax-inclusivity, customers are informed of the amount of the tax that their total includes.
      • To include tax in the total at checkout for every customer in this market, select Show as included. Customers are informed of the amount of tax that their total includes.
      • To add tax as a separate line item at the checkout for every customer in this market, select Show as line item.
   2. Select whether to add duties to the customer's total at checkout:
      • To calculate and add duties at checkout, select Show as line item.
      • To pay for duties yourself rather than adding it to your customer's total, select Duties included in price.

6. Click Done.

7. If you've activated calculation and collection of duties, then review the terms of service and the transaction fee, and then click Done.

8. In the top bar, click Save.

Add HS codes and the country or region of origin to your products

To display a duties estimate to international customers in your checkout, you should edit your product details to include the country or region of origin and the HS code for better accuracy. If a product is missing an HS code, then calculations are based on the product's description and product category instead. If a product doesn't have an HS code, description, or category, then duties and import taxes are still calculated, but are likely to be inaccurate.

The country or region of origin (COO) is where a product is created or assembled into the form in which you sell it, and where it takes on its HS code classification. For example, you sell a table. The table is made of wood from Canada, glue from Mexico, and screws from China. The table is assembled from these materials in the United States. In this case the country or region of origin is the United States, because that's where the materials are used to create the table. You can set the COO for your products by adding them to products individually, with a CSV file, or by using the bulk editor. You can also set a default COO to be used if a product doesn't have a COO assigned to it.

The HS code is used in international trade to describe what a product is. Typically, the HS code is six digits long, but individual countries can add longer codes following the first six digits for further classification. When a country-specific HS code exists, that code is used to calculate duties. If a country-specific HS code doesn't exist, then the six-digit global code is used instead.

For example, you have a product with an HS code of 3210.00. You sell to Canada and to the United Kingdom. You don't have a country-specific HS code for Canada, but you do have a specific code for the United Kingdom: 3210.00.123. For UK orders, 3210.00.123 is used to calculate duties. For Canadian orders, 3210.00 is used instead.

Learn more about HS codes from the World Customs Organization.

To add an HS code and a COO to products, choose one of the following options:

• Import the information with a CSV file.
• From the Shopify admin, add the information on the product's page.
• Use the bulk editor.

Add HS codes and COO by importing a CSV file

If you have a lot of products to update and you already know your product HS codes, or if you aren't sure which of your products are missing codes, then you can use a CSV file to update your products.

Steps:

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Duties and import taxes section, click Manage.

3. Export a CSV file of products with missing information.

   1. In the Product information section, click Update with CSV.
   2. Click Export.
   3. Select your preferred file format and click Export products. A CSV file is sent to you in an email.

4. Edit your CSV file by using a spreadsheet program such as Google Sheets.

5. Import your edited CSV file.

   1. In the Product information section, click Update with CSV.
   2. Click Import.
   3. Add your file for import, either by clicking Add file or by dragging and dropping your file to the import window.
   4. Click Upload.
   5. Click Import. An email is sent to you when the process is complete.

The duties and import taxes CSV file is similar to other CSV files that you use with Shopify, but has different columns. The following columns are used in the duties and import taxes CSV:

• Product Handle - Handles are unique names for each product. They can contain letters, dashes and numbers, but no spaces. A handle is used in the URL for each product.
• Product title - The Title column is optional, and can be blank.
• Variant SKU - The stock keeping unit (SKU) of the product or variant. This value is used to track inventory with inventory tracking services.
• Option1 Name - If a product has an option, then its name is displayed in this column. For example, Color. For products with only a single option, this value should be Title.
• Option1 Value - If a product has an option, then its value is displayed in this column. For example, Black. For products with only a single option, this value should be Default Title.
• Option2 Name - If a product has a second option, then its name is displayed in this column. For example, Size.
• Option2 Value - If a product has a second option, then its value is displayed in this column. For example, Large.
• Option3 Name - If a product has a third option, then its name is displayed in this column. For example, Material.
• Option3 Value - If a product has third option, then its value is displayed in this column. For example, Cotton.
• Country of origin - The country of origin is where the product was created or assembled into the form that it is sold in. The value in this column is used to estimate duties and import taxes for international customers.
• HS code - The HS Code is a number that classifies a product for international trade. The value in this column is used to estimate duties and import taxes for international customers.

Add HS codes and the country or region of origin on the product page

If you don't have many products to update and you don't know your product HS codes, then you can add the HS code and country or region of origin directly on a product's page.

Steps:

1. From your Shopify admin, go to Products.

2. Click the product that you want to edit.

3. Add the product details:

   1. Click HS code.
   2. Select a country or region of origin.
   3. Enter an HS code. If you don't have an HS code for your product, then start typing a description of your product to search for the appropriate code.

4. Optional: If you require more detail for the countries and regions that you sell to, then you can further classify your product by region:

   1. Add additional digits to the country-specific HS code. Alternatively, click , and then click Add HS codes by country/region.
   2. In the Add HS codes by country/region modal window, click Select, and then select the country or region for the classification. You can only select countries or regions from your markets.
   3. In the HS code section, enter the HS code specific to that region. Typically, this is the standard six-digit code with additional digits or letters added to the end.
   4. To add additional HS codes, click Add country/region.

5. Click Add.

Add HS codes and a country or region of origin using the bulk editor

If you don't have many products to update and you already know your product HS codes, then you can add the HS code and country or region of origin using the bulk editor.

Steps:

1. From your Shopify admin, go to Products.

2. Check the products that you want to modify.

3. Click Edit products.

4. Click Add fields.

5. Click HS code, enter the HS code, and then select the country or region of origin.

6. Click Save.

Setting a default COO

You can set a default COO to use for products in your store. If the majority of your products are from the same country or region of origin, then you can set a COO to be automatically used for the calculation of duties and import taxes. The default COO is used only when a product doesn't have a COO assigned to it. If a product has a COO assigned, then the COO that's been manually assigned overrides your default COO.

Steps:

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Customs information section, click .

3. Click Default country of origin.

4. Select the country to use as the default COO for your products.

5. Click Save.

HS codes and COO in Managed Markets

When you activate Managed Markets, certain changes take place in your store. One of these changes is to your customs information for your products:

• HS codes are automatically assigned to your products. If your products already have HS codes assigned to them, then they're taken into account when determining the HS codes that Managed Markets applies to your products. However, it isn't guaranteed that the exact HS code that you entered for your product is the same that will be used by Managed Markets.
• If you haven't already set a default COO in your store, then Managed Markets assigns a default COO based on where most of your products are made. If you already have a default COO, then there are no changes.

If you've manually assigned HS codes and COO to your products, then you can review and compare them to the HS codes that Managed Markets assigns to them.

Steps:

1. From your Shopify admin, go to Products.

2. Click the product that you want to review.

3. In the Shipping section, click next to Harmonized System (HS) code.

4. Click Managed Markets codes.

Stop collecting duties and import taxes at checkout

You can stop the collection of duties and taxes in your checkout for individual countries or regions at a time, or you can entirely deactivate the feature to completely stop the collection of duties and taxes for all countries and regions.

Deactivate collection of duties and import taxes for individual countries or regions

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Duties and import taxes section, click Manage.

3. In the Countries/regions section, click Manage.

4. Uncheck the country or region where you want to stop collecting duties and import taxes.

5. Click Save.

Deactivate collection of duties and import taxes for all countries and regions

1. From your Shopify admin, go to Settings > Taxes and duties.

2. In the Duties and import taxes section, click Manage.

3. Click Turn off.

4. Confirm your choice and click Turn off.