This is not tax advice — get an accountant who does cross-border ecommerce. What follows is what the platform does, what it does not, and which decisions are yours.
What Shopify handles
Rate calculation at checkout for most jurisdictions, collection of the tax, and reporting that tells you what you collected where. Shopify Markets adds per-market pricing, currency and duty estimation.
That covers the mechanics. It does not cover registration, filing, or remittance — those are yours in every jurisdiction where you cross a threshold.
Where it becomes your problem
Registration thresholds. Every jurisdiction has one, and they differ. Cross it and you have an obligation that started at the crossing, not when you noticed.
- UK: VAT registration required above the domestic threshold; for goods sent into the UK from abroad, registration can be required from the first sale
- EU: the IOSS scheme covers consignments under 150 euros; above that, import VAT and duty apply at the border
- US: economic nexus per state, thresholds typically a revenue figure or transaction count, and both the number and the rules vary by state
- Australia: GST registration required above the annual turnover threshold for imported goods
Thresholds change. Check current figures rather than trusting a blog post, including this one.
Filing and remittance. Shopify collects. You file. Tools like Avalara automate the filings; the obligation remains yours.
The duty decision that changes conversion
Two models, and this is a genuine commercial choice rather than a compliance one.
| Model | Customer experience | Effect |
|---|---|---|
| DDP — duty paid at checkout | Total shown upfront, nothing on delivery | Higher cart total, far fewer refusals |
| DDU — duty on delivery | Lower cart total, carrier invoice later | More abandonment at the door, more support, more returns |
DDP is almost always the right answer for DTC. A customer presented with an unexpected charge by a courier refuses the parcel, opens a ticket, and does not order again. The order is lost after you already paid to ship it.
DDU in international DTC generates refused deliveries, chargebacks and support volume that costs far more than the margin saved by not quoting duty. Shopify Markets Pro and the duty estimation in Markets exist to make DDP straightforward — use them.
HS codes
Every product needs one. Wrong codes mean wrong duty, delays at customs, and penalties that land on you rather than the carrier.
Shopify has a field for this. Fill it properly, per product, and get the classification checked by someone who does this for a living if your range is at all unusual.
The practical order of operations
- One or two markets first, properly, rather than switching on the world
- Register where you will plausibly cross a threshold within a year
- Set HS codes before the first international order, not after
- Choose DDP and show the full landed cost
- Automate filings once you have more than two jurisdictions
Talk it through
Tell us which markets you are opening.
We will tell you what Markets covers, what needs an app, and where you need an accountant rather than a developer.
Ask usA real read within one business day — not a sales call.
About the author
Manpreet Singh
Founder of Proscube. Leads the studio's Shopify, headless and CRO engineering, and works directly with founders rather than through account managers.
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