Sales taxes and the QBO Connector

When you sell through the Shop app, Shopify often pays marketplace VAT directly to the appropriate authorities before sending you the proceeds. In Shopify payout reports, these are given labels like “Marketplace taxes."

After you make a sale through the Shop app, the QuickBooks Online Connector imports VAT information, then identifies the marketplace VAT and charges it to the VAT Payable chart of accounts. These charges are given labels like "Shopify VAT item."

When you get the payout, the QuickBooks Online Connector adjusts the VAT Payable chart of accounts to balance the account with the marketplace taxes withheld by Shopify. When you open the Review, you'll see this adjustment under Funds in this payout.

Note: By default, marketplace taxes are assigned to the VAT Payable account. You can change this in your settings or for individual payouts. 

When you’re responsible for taxes instead of Shopify, the QuickBooks Online connector automatically accounts for them based on how much you owe in your sales location. We record the taxes you’re responsible for in the sales receipt’s VAT rate section.

We automatically charge the amount to the appropriate tax agency account for your location.