Please note this article is current as at September 2020.
Does this scenario look familiar? You have a Shopify store with an Australian address. But your default currency is USD. Because Shopify will only make payouts in AUD currency, you must pay a 2.8% ‘Shopify Payments Fee’ plus a 1.5% ‘Currency Conversion Fee’ instead of the usual 1.75/1.6/1.4% fee for AUD payments (rate depends on the Shopify plan you choose). On average you are most likely paying 2 to 3% extra on every international order you fulfill.
The reason you cannot nominate a USD bank account to be your linked account is because currently, Shopify only allows payouts to Australia in AUD. This may change in the future. Shopify does allow more than one currency for some countries – for example Shopify pays both CAD and USD to Canadian Shopify files.
There is work around that is almost available – but it isn’t easy. Read on for instructions. Please note that you can do steps 1 through 2 any time, but step 3 is still being resolved.
- Set up a United States Mailing Address and United States Phone number. There are a number of services that can provide a mail forward service for you (just google for some options). A phone number can be set up using Zoom or Skype.
- Set up a EIN (Employee Identification Number) – this is a Federal US tax ID number, similar to our ABN or TFN here in Australia. You can get this issued even though you are not a US resident. To do this, fill out a US SS-4 form (you don’t have to lodge this, but you will have to have your answers ready). Call +0011 1 267 941 1099 during business hours (EST). Follow the key codes to speak to a representative who will help you register for an EIN over the phone. Be sure to tell them that you are a foreign corporation.
- If your business receives this EIN – will your business have to collect sales tax or pay income tax in The United States? Read this article to learn more information about this.
- Set up a USD bank account. Not any USD bank account will do, because it needs to be opened with a social security number. We spoke with our friends at Air Wallex today who are working on supplying a compliant bank account for this purpose, and hope to have this ready by October 2020.
- Go into Shopify, and temporarily remove Shopify payments. Update your address to the USA address in settings.
- Then go back and enable Shopify payments. Enter the information requested, including your EIN and USD bank account.
- Feel free to touch base with us here at CloudCounting – but please note we only support eCommerce clients that use us as their tax agent.
- Good luck! If you discover any other ways to do this, please get in touch, and we can update our blog.