Dear Shopify Plus Support,
I am writing to raise an urgent issue related to tax calculations on shipping fees during the ongoing Canadian federal tax holiday (December 15, 2024, to February 14, 2025). This issue has significant implications for compliance with Canadian Revenue Agency (CRA) regulations and is impacting both our business and our customers.
As a Shopify Plus retailer based in Canada, our team discovered that Shopify’s proportional tax calculation on shipping fees for orders containing tax-exempt products is not aligned with CRA guidelines. According to the CRA, the GST/HST holiday applies to specific product categories, and there is no mention of shipping fees needing proportional tax adjustments.
Details of the Issue:
- Tax is being undercharged on shipping fees when orders include products eligible for the federal tax holiday.
- This behavior appears to stem from Shopify’s recent update: Shopify Changelog - Proportional Tax on Shipping.
- CRA guidelines for the tax holiday do not mention shipping fees needing proportional adjustments: CRA Tax Break Details.
Impact:
- Compliance risk: The current implementation could expose our business to audit risks if customers are charged incorrect taxes.
- Customer dissatisfaction: Customers may perceive our pricing as inconsistent, which damages trust.
- Revenue loss: Miscalculations on tax can lead to operational challenges, particularly during the peak holiday season.
This issue is not isolated to our store, as similar concerns have been raised in the Shopify community forums: Community Thread on Tax Errors.
Request for Action:
We request that Shopify prioritize this issue and provide an immediate resolution to align with CRA regulations. Specifically, we need:
- A review of how tax is calculated on shipping fees for orders with tax-exempt items.
- Confirmation that tax calculations adhere to CRA guidelines during the tax holiday.
- Guidance or workarounds for Shopify Plus merchants impacted by this issue.
This matter is critical to ensuring compliance and maintaining customer trust. Please acknowledge receipt of this email and provide an estimated timeline for resolution.
Thank you for your prompt attention to this matter. I look forward to your response.
Best regards,