When you sell products online, shipping isn’t just about logistics — it’s also about compliance.
Depending on your region, you may be legally required to charge taxes on your shipping rates just like you do for products.

Shopify makes it easy to manage this. You can decide whether to charge taxes on shipping rates or not — depending on your business location, tax registration, and legal obligations.

In this article, you’ll learn how Shopify handles taxes on shipping, how to enable or disable the option, and best practices for keeping your tax setup accurate and compliant.

How to Enable or Disable “Charge Taxes on Shipping Rates” in Shopify

Follow these simple steps to manage your shipping tax settings:

Step 1: Log in to Shopify Admin

Go to your Shopify Admin Dashboard.

Step 2: Navigate to Tax Settings

Click Settings → Taxes and Duties.

Step 3: Find Your Region

Select the country or region for which you want to manage shipping tax settings (for example, United States, Canada, or European Union).

Step 4: Toggle the Setting

Scroll down and find the option labeled:
“Charge taxes on shipping rates.”

You’ll see a checkbox:

• ✅ Checked: Taxes will apply to shipping rates at checkout.

• ⛔ Unchecked: Shipping will not be taxed.

Once selected, click Save.

That’s it — Shopify will now automatically calculate taxes on shipping based on your configuration.

Example Scenarios

Let’s look at how this setting affects your checkout in different regions.

🇺🇸 United States

• Taxable shipping: Only if the product being shipped is taxable and shipping is part of the sale.

• Non-taxable shipping: If products are exempt (e.g., food, medicine), shipping may also be exempt.

Example:
If you sell a taxable T-shirt for $30 with $5 shipping:

• If “Charge taxes on shipping rates” is enabled → Tax applies to $35 total.

• If disabled → Tax applies only to $30 (product).

🇨🇦 Canada

• Shipping is almost always taxable if the shipped items are taxable.

• You should enable “Charge taxes on shipping rates” to comply with GST/HST rules.

🇪🇺 European Union

• Shipping is always taxed at the same VAT rate as the products being shipped.

• Shopify automatically applies VAT to shipping if enabled.

🇬🇧 United Kingdom

• Similar to the EU: VAT is applied to shipping if the items are VAT-applicable.

Top 9 Best Shipping Rate Apps for Shopify

Whether you need to charge taxes on shipping rates in Shopify depends entirely on your regional tax laws — but configuring it is simple.

By going to Settings → Taxes → Charge taxes on shipping rates, you can ensure your store charges the correct amount of tax for every order.

This helps you:

• Stay compliant with tax authorities

• Build customer trust with transparent pricing

• Avoid underpaying or overpaying taxes

If you’re unsure, always check with your accountant or a Shopify tax expert.
Getting your Shopify shipping tax setup right today will save you time, money, and headaches later. 💼✅