Display is not exemption
Tax Display never removes tax at checkout.
Tax and compliance
Shopify B2B Tax and Compliance: Tax Exemption, VAT IDs and Tax Display
B2B tax on Shopify comes down to three questions: who is exempt, how you verify their tax ID, and whether prices show with or without tax. This hub explains tax exemption, tax ID validation and tax display, and links to guides and docs. It is not tax advice, so confirm the rules with your adviser.
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Key concepts
Tax exemption
An eligible business buys without tax being charged on the order.
Glossary: Tax exemptionTax ID
The number that identifies a business for tax, such as an EU VAT number, a US EIN or an Australian ABN.
Glossary: Tax IDVAT reverse charge
The buyer, not the seller, accounts for the VAT, which is common on cross-border B2B sales in the EU.
Glossary: VAT reverse chargeResale certificate
A US document a reseller gives to buy goods for resale without paying sales tax.
Glossary: Resale certificateTax display
Whether prices are shown including tax, excluding tax, or both. It changes what buyers see, not what is charged.
Native Shopify tax settings vs BSS B2B Solution
Shopify decides tax from the customer or the company location. BSS B2B Solution adds tax ID checks, a cart-level exemption flow and per-group price display.
| Requirement | Shopify native | BSS B2B Solution |
|---|---|---|
| Mark a buyer exempt | On the customer or company location: Collect tax, Don't collect tax, or Collect tax unless exemptions apply. The customer must check out with the same email as the account.[1][2] | Tax Exempt module: the buyer enters a tax ID on the cart page and the app creates a tax-free draft order. Advanced and Platinum plans.Docs: tax exempt |
| Tax ID validation | On UK and EU company locations using Shopify Tax, the Tax ID field becomes a VAT number field that Shopify Tax validates.[2] | Registration form fields check EU VAT (VIES), UK VAT (HMRC), US EIN, ABN and India GST as the buyer types.Use case: EU VAT validation |
| Tax-included prices | A tax-exempt customer on tax-included pricing is still charged the full listed price.[1] | Tax Display shows prices with tax, without tax, both, or an Inc. VAT and Exc. VAT toggle, per customer group. Display only.Use case: prices excluding VAT |
Test tax ID checks and price display on a development store before you pay.
Get BSS B2B SolutionNumbers in brackets point to the Shopify sources below.
Exemption, reverse charge and resale certificates
What is the difference between tax exemption and tax display?
Exemption changes what tax the order carries. Display changes only what the buyer reads on the page. A shop can show prices without VAT to businesses and still charge VAT at checkout.
What is a VAT reverse charge?
Under a reverse charge, the buyer rather than the seller accounts for VAT, commonly on cross-border B2B sales in the EU. The Tax Exempt module is not a reverse-charge calculator: it creates a tax-free draft order. Whether an exemption or reverse charge applies is a question for your tax adviser.
What is a US resale certificate?
A resale certificate lets a reseller buy goods without paying sales tax. Neither Shopify nor BSS B2B Solution reviews a certificate for you. Collect the document with a file upload field on the registration form, up to 10 MB, and review it yourself.
How does tax ID validation work?
Which tax IDs can the app check?
EU VAT is checked against VIES, UK VAT against HMRC, a US EIN against an EIN lookup, an Australian ABN against the ABN register, and India GST against its status. ABN and GST numbers must be active.
Where does the check run?
It runs live on the registration form field and on the Tax Exempt form at the cart, as the buyer types. A bulk import of applicants runs no live tax ID check.
What happens when a number fails?
On a registration form, an invalid number blocks submit only when the field is required. The check runs in the browser and is not repeated on the server, so use it to screen applicants, not as proof of status.
How does the Tax Exempt module work at the cart?
The buyer enters a tax ID in a block on the cart page, or in a form on the product page for Buy It Now. The app checks the number and creates a draft order with tax exempt set. You can tag the order for your records.
Which plan do I need?
Tax Exempt and Tax Display are on the Advanced and Platinum plans. A US EIN field needs Platinum. Check the App Store listing for current plans before you buy.
Can I show prices without VAT to businesses?
Yes. Tax Display rules can target customers by tag, for example a vat-registered tag, and show prices with tax, without tax, both, or a toggle. The rule changes the page, not the tax charged.
ExampleOne product, three buyers
A fictional shop sells shower gel at $60.00 before VAT. The 10% rate is illustrative, not advice.
| Buyer | Price shown | What happens at the order |
|---|---|---|
| Retail shopper | $66.00 inc. VAT | VAT is added as usual. |
| Business buyer tagged vat-registered | $60.00 exc. VAT | $66.00 inc. VAT | Display only. Tax is still calculated unless the buyer is exempt. |
| Same buyer enters a valid VAT ID at the cart | Same prices | The app creates a tax-free draft order, tagged if you set an order tag. |
A buyer who goes straight to the checkout URL skips the cart block and is taxed normally.
Native settings or BSS B2B Solution?
Native settings are enough when
you know your exempt buyers in advance, set them up as customers or company locations yourself and check tax IDs by hand.
Add BSS B2B Solution when
buyers must enter and validate a tax ID themselves, you need tax ID fields on applications, or you show prices with and without tax to different groups.
How tax features work in BSS B2B Solution
Six steps to a tax setup you can test.
-
Collect the tax ID
Add a tax ID field to the registration form and mark it required.
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Decide who is exempt
Define which verified businesses buy without tax and which proof you accept.
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Add the Tax Exempt block
Add the block to the cart page and turn the module on.
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Set price display
Pick prices with tax, without tax, both or a toggle for each group.
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Handle buyers without a VAT number
Decide how businesses that are not VAT registered are treated.
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Test as a buyer
Enter a valid and an invalid ID on the cart and check each result.
Source: Display Prices With & Without Tax.
Set up tax IDs and price display on a development store. BSS B2B Solution is free there.
Common mistakes and limits
Read these before you rely on a tax flow.
The cart is the only entry point
The tax ID is entered on the cart or product page, not in Shopify checkout. A direct checkout link skips it.
A failed step falls back to normal checkout
If the draft order cannot be created, the buyer is sent to regular checkout and taxed. With require valid ID turned off, an invalid number can still check out.
Imports are not checked
A bulk import of applicants runs no live tax ID check, so review imported numbers yourself.
Plans differ
Tax Exempt and Tax Display need the Advanced or Platinum plan. The US EIN field needs Platinum.
Tax Display reads rates, not overrides
Display rates come from Shopify's country rates. Shopify's own tax overrides are not read, so recreate any you need in the app.
Use cases
Worked examples of tax and compliance on Shopify. Browse all use cases.
Exempt Tax for Customers Without a VAT Number
Exempt tax for approved wholesale buyers who have no VAT number to validate, by applicant, by Shopify customer or automatically through a registration form, with BSS B2B Solution.
Explore use case: Exempt Tax for Customers Without a VAT Number
Show Prices Excluding VAT to Business Buyers
Show wholesale buyers prices excluding VAT and consumers prices including VAT on one Shopify store, with rules by customer tag, using the Tax Display module in BSS B2B Solution.
Explore use case: Show Prices Excluding VAT to Business Buyers
Onboard Tax-Exempt Buyers With Net Terms
Verify a tax ID once at registration, then give approved buyers tax exemption and Net Terms with a Pay later button using BSS B2B Solution for Shopify.
Explore use case: Onboard Tax-Exempt Buyers With Net Terms
Sell VAT-Exempt to EU Businesses With a Valid VAT ID
Let EU business buyers enter a VAT ID in the cart, validate it live and remove tax from the order with the Tax Exempt module in BSS B2B Solution, instead of charging VAT and refunding it later.
Explore use case: Sell VAT-Exempt to EU Businesses With a Valid VAT ID
Industrial Spare Parts: B2B Store With VAT and Hidden Prices
Run a B2B spare parts store for contract buyers across Europe: registration with VAT number validation, volume tables with prices before and after tax, and prices hidden from guests with BSS B2B Lock.
Explore use case: Industrial Spare Parts: B2B Store With VAT and Hidden PricesHandle B2B tax with BSS B2B Solution
Validate tax IDs at registration, manage tax exemption and show prices with or without tax to the right customer groups.
Frequently asked questions
What is the difference between tax exemption and tax display?
Tax exemption removes tax from an order for an eligible buyer. Tax display only controls whether prices are shown with or without tax. In BSS B2B Solution, Tax Display does not remove tax at checkout.
Does Shopify support tax-exempt B2B customers?
Yes. On a customer or company location you can choose Collect tax, Don't collect tax, or Collect tax unless exemptions apply. The customer must check out with the email on the account.
Does tax exemption work with tax-included prices?
Shopify warns that a tax-exempt customer on tax-included pricing is still charged the full listed price. Check how your store displays prices before you rely on exemption.
What is a tax ID and why collect it?
A tax ID, such as an EU VAT number, US EIN or Australian ABN, identifies a business. Validating it at registration helps you check the number before you apply any exemption.
Can Shopify validate EU VAT numbers?
On UK and EU company locations that use Shopify Tax, the Tax ID field becomes a VAT number field that Shopify Tax validates. BSS B2B Solution also checks EU VAT, UK VAT, EIN, ABN and GST on registration forms.
What is VAT reverse charge?
Under a reverse charge the buyer, not the seller, reports and pays the VAT, commonly on cross-border B2B sales in the EU with a valid VAT ID. Rules differ by country and goods, so confirm with a tax adviser.
Can I show prices without VAT to businesses and with VAT to consumers?
Yes. In BSS B2B Solution, Tax Display rules can target customers by tag and show both prices, tax-inclusive only, tax-exclusive only, or an Inc. VAT and Exc. VAT toggle.
Can a buyer enter a tax ID at checkout?
In BSS B2B Solution the buyer enters it on the cart page or a product page form, not inside Shopify checkout. The app then creates a tax-free draft order.
Where do I add the Tax Exempt block?
In the theme editor, add the Tax Exempt block to the cart page. A form on the product page covers Buy It Now. Turn the module on in the app and test with a buyer account.
Is this tax advice?
No. Tax rules depend on your country, your buyer's country and what you sell, so confirm your obligations with a qualified tax adviser.
Sources and method
Shopify facts come from the pages below. BSS facts follow our checks against the app. We make BSS B2B Solution, so check Shopify's pages before you buy. This is not tax advice.
Related hubs
Customer onboarding
Turn applicants into approved wholesale buyers with registration forms, approval and customer tags.
Order rules and terms
Set minimum orders, case packs and net payment terms for wholesale buyers.
Wholesale pricing
Show business buyers their own prices with price lists, custom pricing and quantity breaks.
Shopify B2B: the complete guide
Native B2B vs apps, and how the six hubs fit together.