Post-Brexit Duty Rules
When selling from the UK to EU customers, UK-origin goods may attract import duties depending on the product type and rules of origin. The UK-EU Trade and Cooperation Agreement provides zero tariffs for goods that meet the Rules of Origin requirements, meaning they are manufactured in the UK.
Goods that do not meet Rules of Origin (e.g., goods imported from Asia and resold) attract import duties when entering the EU. UK merchants are responsible for communicating this clearly to customers.
Shopify Markets Duties
Shopify Markets (available on all plans) includes duty and import tax calculation for international orders. Enable it under Settings, then Markets. For each market, you can configure whether duties are included in the displayed price (DDP) or added at checkout.
Shopify uses Avalara for duty and tax calculations when you enable this feature. It calculates based on HS codes, product values, and destination country rules.
Delivered Duty Paid
Delivered Duty Paid (DDP) means the seller handles all import duties, so the customer pays a fully landed price with no surprise charges on delivery. This dramatically improves customer experience and reduces package refusals.
To offer DDP, enable "Collect duties and import taxes at checkout" in your Shopify Markets settings for each international market. Shopify collects the estimated duties and remits them appropriately.
Threshold Limits
The EU removed its €22 VAT threshold in 2021. All goods, regardless of value, are now subject to VAT when imported into EU countries. The UK similarly applies VAT to all imported goods from January 2021.
For goods valued under €150 entering the EU, VAT is collected by the seller at point of sale via the EU's One Stop Shop (OSS) or Import One Stop Shop (IOSS) scheme. For goods over €150, duties and VAT are assessed by customs.
VAT for Digital Products
Digital products sold to EU customers are subject to VAT in the buyer's country, regardless of where the seller is based. This has applied since 2015 for EU-based sellers and since Brexit applies directly to UK sellers selling into the EU.
Register for VAT OSS in an EU member state if you sell digital products to EU consumers above the €10,000 annual threshold. This lets you file a single quarterly return covering all EU VAT obligations.
Testing Checkout
Test international checkout by using VPN to simulate orders from different countries. Check that duty and tax estimates are displayed clearly, the currency is correct, and the total reflects DDP pricing if you have enabled it.
Run test transactions with Shopify's test payment gateway for each key international market before launching. Check that orders are being captured correctly and that duty collection is appearing on order receipts.
