Shopify Accounting for Estonian Businesses

Neither in isolation — and this is exactly the reconciliation challenge. Shopify’s Finance reports show gross order values including VAT and before fees are deducted. Your bank account shows net payouts after fees, which arrive 1–3 days after the transactions they relate to. For accounting, you start with Shopify’s gross order data (to capture full revenue, all VAT, and all fees separately), then reconcile to the bank payout to confirm the cash position. The correct accounting figures come from reconciling both sources against each other — not from either one alone.

VAT is always calculated in EUR for Estonian and OSS purposes, regardless of the currency the customer paid in. If a German customer pays in USD, you convert the order value to EUR at the transaction-date rate, then apply the German 19% VAT rate to the EUR-converted amount. In Shopify, if multi-currency is enabled, the tax is calculated on the store’s base currency equivalent — ensure your store’s base currency is set to EUR, which automatically handles this conversion. In your accounting records, post both the USD amount received and the EUR equivalent, and document the exchange rate used.

The €3,200 in EU VAT collected by Shopify represents your OSS liability for that quarter. In your OSS return, you declare each EU country’s net sales and the applicable VAT — the country breakdown comes from Shopify’s Sales by Country report (or your tax app’s country-level report). The sum of all EU B2C VAT across all countries should equal the €3,200 from Shopify’s tax summary. If there is a discrepancy, investigate before filing — it could indicate that domestic Estonian sales were incorrectly included in the EU total, or that some B2B sales had VAT applied when they should have been zero-rated under reverse charge.

Shopify’s standard order confirmation email is not a valid VAT invoice under Estonian or EU requirements — it lacks several required fields (your VAT number, the buyer’s VAT number for B2B, the explicit VAT rate and amount on separate lines). You can configure a custom invoice template through Settings → Notifications → Edit, or use a Shopify app specifically designed for EU VAT-compliant invoicing (Invoice Falcon, Order Printer Pro, and Sufio are commonly used). For B2B customers requiring reverse-charge invoices, the invoice must include their VAT number and the reverse-charge note. This is a compliance requirement — not optional.

A chargeback has two accounting effects: the revenue from the original order is reversed (credit note against the original sale), and the chargeback fee charged by Shopify is an additional cost. Journal entry: DR Revenue (original net sale), DR VAT Payable (original VAT amount), DR Chargeback Fee Expense (Shopify’s dispute fee, typically €15), CR Cash — Shopify Payments (total deducted from payout). If you win the chargeback dispute and Shopify reverses it, you make the opposite entry to restore the original revenue and cancel the fee. Track chargebacks as a separate KPI — a chargeback rate above 1% is a signal of product or fulfilment issues.