How tax calculation works in Shopify with Quaderno

Quaderno and Shopify work together to manage your taxes in two phases: calculation and documentation.

What each platform does

• Shopify manages the checkout experience: it applies taxes to the cart and charges the customer.
• Quaderno receives each order, recalculates taxes using its own tax engine, and generates the corresponding invoice or receipt.

By default, Quaderno does not simply copy the taxes Shopify shows at checkout. It runs its own calculation to ensure the correct tax treatment is applied based on the buyer's jurisdiction, the product type, and the customer's profile (consumer or business).

What Quaderno's tax engine handles automatically

Quaderno's tax engine analyses each order and determines the correct treatment without any manual intervention:

Cross-border sales to businesses (B2B)

When an order includes a valid tax identification number (VAT number, ABN, etc.), Quaderno validates it automatically against official registries (VIES for the EU, HMRC for the UK, ABN for Australia, and others). If the number is valid, it applies reverse charge on intra-EU sales and other cross-border B2B transactions where applicable.

Digital products (e-services, e-books, SaaS)

For orders that require no physical shipping, Quaderno automatically applies digital services tax rules: destination VAT for sales to consumers in the EU, and the correct treatment for customers in the UK, Norway, Australia, and others.

You can find out exactly how Quaderno detects whether a product is digital or physical in our article on how Quaderno determines the product type on Shopify orders.

OSS and IOSS for EU sellers

If you are registered under the EU OSS (One Stop Shop) scheme for intra-EU sales, or IOSS (Import One Stop Shop) for low-value imports, Quaderno automatically applies the destination country's VAT rate instead of your own country's rate, as long as the corresponding jurisdiction is registered in your account.

Exemptions and reduced rates

Quaderno applies the reduced rates and exemptions in force in each jurisdiction based on the product type and customer profile.

Required setup

For the system to work correctly, you need to configure both platforms.

Step 1: Set up taxes in Shopify

Tell Shopify which countries or states you are registered to collect tax in. Shopify will apply them during the checkout process.

See Shopify's official guide to complete this step.

Step 2: Register your tax jurisdictions in Quaderno

Add the same jurisdictions in Quaderno that you configured in Shopify. Quaderno needs this information to:

• Calculate the correct tax for each sale.
• Generate legally valid invoices with the correct tax breakdown.
• Include each transaction in the tax report for the corresponding jurisdiction.

Go to your Jurisdictions page and add all the countries or territories where you are registered.

Using Shopify's calculated taxes

If needed, we can configure your account so that Quaderno uses the tax amounts calculated by Shopify at checkout instead of recalculating them. Contact Quaderno support to request this.