Introduction

Overview

Tax Exempt is a module inside OO - B2B & Wholesale. EU B2B customers validate a VAT number, and the order can then be processed without VAT when they are eligible.

It is included in the Starter plan. Open it from Apps → B2B & Wholesale → Tax & prices, and turn Tax Exempt on.

Tax Exempt does not calculate tax itself. Shopify’s tax and market settings decide how VAT is removed. Tax display is a different module: it only changes incl./excl. labels and does not exempt VAT at checkout.

Two checkout modes

Choose one mode in Tax Exempt → General settings → Use draft order logic.

Draft order logic

After a successful VAT check, the app creates a Shopify draft order and sends the customer to that checkout. Use this when you sell prices including VAT and need the app to remove VAT itself.

In Markets → your EU market → Taxes and duties, set tax display to Show as included.

Standard checkout

Leave Use draft order logic off. Shopify’s own tax exemption then applies in the normal checkout. This is the mode to use when your prices are excluding VAT.

In the EU market, set tax display to Dynamic pricing. If the whole store already sells excluding VAT, Dynamic pricing with draft order logic off is the right setup.

Do not combine the two draft checkouts

B2B prices from Custom Pricing, Volume pricing and Bulk forms also use a draft-order checkout. Do not turn on Use draft order logic for Tax Exempt at the same time. Those two draft flows are not merged yet. For a store that uses B2B prices and VAT exemption together, use standard checkout for Tax Exempt.

Setup in the app

1. Turn Tax Exempt on under Tax & prices.

2. Enable the app embed in the active theme. The setup guide opens the theme editor for you.

3. Add the VAT form to the cart page with the cart app block, or paste <div id="ooTaxExemption"></div> into the cart drawer.

4. Fill in General settings, including the checkout mode.

5. Check Settings → Taxes and duties and the EU market tax display, using the guide in the app.

6. Optional: on a customer page in Shopify admin, add the VIES VAT Information block.