Correct tax configuration in Shopify is an essential requirement to guarantee the validity of invoicing and compliance with tax obligations. Proper parameterization ensures that the applied tax rates match those required by current regulations and that tax filings are compliant with the authorities.
In particular, within the framework of fiscal control systems such as Verifactu (state-level in Spain) and TicketBai(mandatory in the Basque Country), incorrect tax configuration results in the automatic rejection of issued invoices. If an invoice is rejected, it has no fiscal validity. This is why rigorous configuration aligned with applicable tax regulations is so important.
Importance of Tax Configuration in Shopify
European and Spanish VAT regulations require the correct application of tax rates based on the buyer’s location, the nature of the goods, and the company’s tax regime.
Shopify’s integration with systems such as Verifactu and TicketBai requires that taxes are properly configured in Shopify and accurately reflected in every electronic invoice.
An error in this configuration is not merely an administrative irregularity: it renders the invoice invalid and therefore prevents it from being recognized for tax purposes.
Configuration Procedure in Shopify
Go to Settings → Taxes and duties in Shopify.
Under Tax regions, select European Union.
In the VAT collection section, select Spain.
Enter your VAT ID number (NIF), whether you are a company or self-employed. It must include the prefix ES(e.g., ESB12345678).
In the Collect VAT on cross-border sales section, configure your business for online store sales:
OSS regime: If your intra-EU sales exceed €10,000 annually, you must register under the OSS regime and apply VAT based on the customer’s country of destination.
Micro-business exemption: Applies to micro-businesses located in an EU country with less than €10,000 per year in sales to other EU countries.
How do I configure multiple tax rates?
If your product catalog includes items subject to multiple tax rates (e.g. VAT 4%, VAT 10%, VAT 21%), you must apply tax overrides using manual collections.
What is a tax override?
A tax override in Shopify allows you to apply a tax rate different from the default one (for example, 7% instead of 21%) to a specific group of products.
This is achieved by associating products with a manual collection and then applying a tax override to that collection.
Important:
Automatic collections cannot be used for this purpose.
Step-by-step: configuring multiple tax rates in your Shopify store
1. Create a manual collection for the tax rate
From the Shopify Admin, go to Products > Collections.
Click Create collection.
Under Collection type, select Manual.
Assign a representative name, such as IVA 4%, IVA 10%, etc.
Optional: hide this collection from your sales channels:
Under Collection availability, 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 has been saved:
Go to the Products section and click Browse.
Select the products to which you want to apply this special tax regime.
Click Done to add them.
Alternatively, you can add products individually:
Go to Products > All products.
Open the relevant product.
In the lower-right section, add the product to the appropriate manual collection.
Ensure that the option Charge tax on this product is enabled (if applicable).
3. Apply the tax override
Go to Settings > Taxes and duties.
In the Spain section, click Add tax override.
Configure the following fields:
Destination zone: Spain.
Collection: the manual collection you created.
Custom tax rate: enter the applicable percentage (e.g. IVA 4%, IVA 10%, etc.).
Save the changes.
Verify that taxes are applied correctly
Create a test order containing a product included in the collection.
During checkout, Shopify should automatically apply the tax rate configured in the override.
What happens if taxes are not configured correctly in Shopify?
If you use VeriFactu to report invoices to the Spanish Tax Agency (AEAT), it is essential that the tax applied to each order correctly reflects the applicable tax regime (e.g. IGIC, IPSI) for your business and products.
Correct tax configuration is critical to ensure that Comply, as well as other accounting integrations, can accurately capture sales, exchanges, and refunds for proper tax reporting to public authorities.
If taxes are not configured correctly, the following issues may arise:
The tax breakdown submitted to the AEAT may not comply with the legal requirements applicable to your autonomous community.
Invoices reported through VeriFactu may be rejected due to incorrect tax rates.
This can lead to tax compliance issues and the need to manually rectify affected invoices.
Administrative and financial penalties in accordance with the Spanish General Tax Law.
Increased risk of audits and additional information requests from the tax authorities.