diff --git a/app/models/spree/shipment_decorator.rb b/app/models/spree/shipment_decorator.rb
new file mode 100644
index 0000000000..ee9189efdd
--- /dev/null
+++ b/app/models/spree/shipment_decorator.rb
@@ -0,0 +1,11 @@
+module Spree
+  Shipment.class_eval do
+    def ensure_correct_adjustment_with_included_tax
+      ensure_correct_adjustment_without_included_tax
+
+      adjustment.set_included_tax! Config.shipping_tax_rate if Config.shipment_inc_vat
+    end
+
+    alias_method_chain :ensure_correct_adjustment, :included_tax
+  end
+end
diff --git a/db/migrate/20150225232938_add_included_tax_to_adjustments.rb b/db/migrate/20150225232938_add_included_tax_to_adjustments.rb
index fa28ab20c7..f3815dec2a 100644
--- a/db/migrate/20150225232938_add_included_tax_to_adjustments.rb
+++ b/db/migrate/20150225232938_add_included_tax_to_adjustments.rb
@@ -1,5 +1,5 @@
 class AddIncludedTaxToAdjustments < ActiveRecord::Migration
   def change
-    add_column :spree_adjustments, :included_tax, :decimal, precision: 10, scale: 2
+    add_column :spree_adjustments, :included_tax, :decimal, precision: 10, scale: 2, null: false, default: 0
   end
 end
diff --git a/db/schema.rb b/db/schema.rb
index cc55ad2392..a325b69f80 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -416,7 +416,7 @@ ActiveRecord::Schema.define(:version => 20150225232938) do
     t.string   "originator_type"
     t.boolean  "eligible",                                       :default => true
     t.string   "adjustable_type"
-    t.decimal  "included_tax",    :precision => 10, :scale => 2
+    t.decimal  "included_tax",    :precision => 10, :scale => 2, :default => 0.0,  :null => false
   end
 
   add_index "spree_adjustments", ["adjustable_id"], :name => "index_adjustments_on_order_id"
diff --git a/spec/models/spree/adjustment_spec.rb b/spec/models/spree/adjustment_spec.rb
index dc17ac5eb2..44d3cab868 100644
--- a/spec/models/spree/adjustment_spec.rb
+++ b/spec/models/spree/adjustment_spec.rb
@@ -7,12 +7,12 @@ module Spree
 
     describe "recording included tax" do
       describe "TaxRate adjustments" do
-        let!(:zone) { create(:zone, default_tax: true) }
+        let!(:zone)        { create(:zone, default_tax: true) }
         let!(:zone_member) { ZoneMember.create!(zone: zone, zoneable: Country.find_by_name('Australia')) }
-        let!(:order) { create(:order) }
-        let!(:line_item) { create(:line_item, order: order) }
-        let(:tax_rate) { create(:tax_rate, included_in_price: true, calculator: Calculator::FlatRate.new(preferred_amount: 0.1)) }
-        let(:adjustment) { line_item.adjustments(:reload).first }
+        let!(:order)       { create(:order) }
+        let!(:line_item)   { create(:line_item, order: order) }
+        let(:tax_rate)     { create(:tax_rate, included_in_price: true, calculator: Calculator::FlatRate.new(preferred_amount: 0.1)) }
+        let(:adjustment)   { line_item.adjustments(:reload).first }
 
         before do
           order.reload
@@ -25,6 +25,56 @@ module Spree
         end
       end
 
+      describe "Shipment adjustments" do
+        let!(:order)          { create(:order, shipping_method: shipping_method) }
+        let!(:line_item)      { create(:line_item, order: order) }
+        let(:shipping_method) { create(:shipping_method, calculator: Calculator::FlatRate.new(preferred_amount: 50.0)) }
+        let(:adjustment)      { order.adjustments(:reload).shipping.first }
+
+        it "has a shipping charge of $50" do
+          order.create_shipment!
+          adjustment.amount.should == 50
+        end
+
+        context "when tax on shipping is disabled" do
+          it "records 0% tax on shipment adjustments" do
+            Config.shipment_inc_vat = false
+            Config.shipping_tax_rate = 0
+            order.create_shipment!
+
+            adjustment.included_tax.should == 0
+          end
+
+          it "records 0% tax on shipments when a rate is set but shipment_inc_vat is false" do
+            Config.shipment_inc_vat = false
+            Config.shipping_tax_rate = 0.25
+            order.create_shipment!
+
+            adjustment.included_tax.should == 0
+          end
+        end
+
+        context "when tax on shipping is enabled" do
+          before do
+            Config.shipment_inc_vat = true
+            Config.shipping_tax_rate = 0.25
+            order.create_shipment!
+          end
+
+          it "takes the shipment adjustment tax included from the system setting" do
+            adjustment.included_tax.should == 12.50
+          end
+
+          it "records 0% tax on shipments when shipping_tax_rate is not set" do
+            Config.shipment_inc_vat = true
+            Config.shipping_tax_rate = nil
+            order.create_shipment!
+
+            adjustment.included_tax.should == 0
+          end
+        end
+      end
+
       describe "setting the included tax by fraction" do
         let(:adjustment) { Adjustment.new label: 'foo', amount: 123.45 }