Why is this configuration necessary?
At present, Shopify does not support the automatic management of multiple tax regimes within Spain, such as IGIC (Impuesto General Indirecto Canario, applicable in the Canary Islands) or IPSI (Impuesto sobre la Producción, los Servicios y la Importación, applicable in Ceuta and Melilla).
Therefore, if your store operates in any of these regions, you must apply a tax override using manual collections to ensure compliance with local tax regulations.
What is a tax override?
A tax override in Shopify allows merchants to apply a custom tax rate (e.g., 7% instead of the standard 21%) to a specific group of products.
This is achieved by assigning the relevant products to a manual collection, and then configuring the override to apply the correct rate to that collection.
Note: Automated collections cannot be used for tax override purposes.
Step-by-step guide: Configuring IGIC or IPSI in your Shopify store
1. Create a manual collection for the applicable tax rate
In the Shopify Admin, go to Products > Collections.
Click Create collection.
Under Collection type, select Manual.
Enter a clear and descriptive name, such as IGIC 7%, IPSI 0.5%, or Reduced VAT 10%.
Optional: To prevent the collection from being displayed on your sales channels:
In the Collection availability section, click Manage.
Uncheck the channels where you do not want the collection to be publicly visible (the tax override will still apply).
Click Save.
2. Add products to the collection
Once the collection is created:
Click Browse in the Products section of the collection page.
Select the products that should be subject to the special tax regime.
Click Done to add them.
Alternatively, you can assign products directly from their individual product pages:
Go to Products > All Products.
Open the relevant product.
In the Collections section (bottom right), add the product to the appropriate manual collection.
Ensure the option Charge tax on this product is checked, if applicable.
3. Apply the tax override
Go to Settings > Taxes and duties.
Under the Spain section, click Add tax override.
Configure the override with the following parameters:
Shipping destination: Spain
Collection: The manual collection you created
Custom tax rate: Enter the applicable percentage (e.g., IGIC 7%, IPSI 0.5%, Reduced VAT 10%)
Save your changes.
Verify that the override is applied correctly
Place a test order that includes a product from the designated collection.
At checkout, Shopify should automatically apply the custom tax rate configured in the override settings.
What happens if I don’t configure my taxes correctly in Shopify?
If you use VeriFactu to report your invoices to the Spanish Tax Agency (AEAT), it is essential that the tax applied to each order accurately reflects the correct tax rate applicable to your business and products (e.g., IGIC, IPSI).
If tax overrides are not properly configured:
The tax breakdown sent to the AEAT may fail to comply with the legal requirements specific to your autonomous region.
Invoices submitted via VeriFactu may be rejected for not accurately reflecting the applicable tax rates.
This can lead to tax compliance issues and the need to manually correct and resubmit each affected invoice.