At home the rules are familiar. Goods and services tax (GST) registration begins at A$75,000 of turnover, one national regime applies and every return is filed in Australian dollars. Overseas, almost none of those assumptions hold.
This report sets out four areas where Australian companies selling into the United Kingdom (UK), the European Union (EU), the US and China most often meet obligations they did not expect. For each, it explains the impact on the company and what the finance team should consider.
SECTION 1
There is no A$75,000 safety net abroad
| A$75,000 GST registration threshold in Australia | 0 Registration threshold for overseas sellers in the UK, EU and China | US$100,000 Most common state threshold for remote sellers in the US |
Australian finance teams are used to GST registration starting at A$75,000 of turnover. That threshold shapes how many companies approach new markets: revenue is monitored against a trigger point and registration follows once it is reached. However, the UK has no threshold for sellers established outside it and neither does the EU or China.
In the UK, a company established overseas must register for value added tax (VAT) from its first taxable sale. In the EU, the €10,000 distance selling threshold applies only to businesses established in a member state, so a seller from outside the EU has no such allowance. In China, VAT on services sold by an overseas company is withheld by the Chinese customer from the first transaction.
The US has no national threshold at all. Each state sets its own, most commonly US$100,000 of sales into that state, although California, Texas and New York sit at US$500,000. A company can cross several thresholds in one year with no single figure to monitor.
| Market | Threshold for an Australian seller | What triggers the obligation |
| Australia | A$75,000 of GST turnover | Turnover reaching the threshold |
| United Kingdom | None | First taxable sale into the UK |
| European Union | None (the €10,000 threshold applies only to EU established sellers) | First taxable sale into a member state |
| United States | Set by each state, most commonly US$100,000 | Sales into a state passing that state’s threshold |
| China | None for overseas sellers | VAT withheld by the Chinese customer from the first transaction |
For the company, the risk is timing. An obligation can start with a very small amount of revenue and liabilities build quietly until someone looks for them. Back taxes and penalties then tend to surface at the least convenient moment, in due diligence or a funding round.
SECTION 2
Australia sits outside the EU’s VAT mutual assistance network
| 27 EU member states, each with its own registration rules | €150 Consignment ceiling for the Import One Stop Shop | 1 EU established intermediary needed to join IOSS |
The EU relies on mutual assistance agreements to cooperate with other countries on the recovery of VAT. Where no agreement exists, member states have less certainty that they can collect tax from a business based in that country, and several respond by asking for additional security at the point of registration.
Australia has no VAT mutual assistance agreement with the EU. As a result, some member states require an Australian company to appoint a local fiscal representative before it can register. Because a fiscal representative is often jointly liable for the VAT owed, it will usually ask for guarantees, deposits or ongoing fees in return.
The same gap applies to the Import One Stop Shop (IOSS), the EU scheme that lets sellers charge VAT at checkout on consignments up to €150 and file a single monthly return. Australian sellers cannot join IOSS directly and must appoint an EU established intermediary to act for them.
For the company, market entry therefore carries a lead time and a recurring cost. It also creates a dependency on a third party. If the relationship with the fiscal representative or intermediary ends, the registration lapses and sales into that market are disrupted until a replacement is in place.
SECTION 3
The US has 46 sales tax regimes, not one
| 46 States plus the District of Columbia levying a statewide sales tax | 10,000+ Local jurisdictions adding their own rates | 2018 Year the Wayfair ruling ended the physical presence test |
There is no federal sales tax in the US. Forty five states and the District of Columbia each run their own, and more than 10,000 local jurisdictions such as counties and cities add rates on top. Each regime sets its own product rules, exemptions and filing calendar, so a product that is taxable in one state can be exempt in the next.
Until 2018, a business generally needed a physical presence in a state before it had to collect that state’s sales tax. The Supreme Court’s decision in South Dakota v. Wayfair removed that requirement. States can now require remote sellers, including overseas companies with no US staff, warehouse or office, to collect sales tax once their sales into the state pass an economic threshold.
Marketplace facilitator laws mean platforms such as Amazon collect and remit tax on the sales they facilitate. Sales through the company’s own website, wholesale accounts or other direct channels remain its responsibility, and in some states marketplace sales still count towards the company’s threshold.
For the finance team, this means tracking sales by state, holding valid exemption certificates for business customers and filing separately in every state where the company is registered, each to its own deadlines.
SECTION 4
China collects VAT from the first transaction
| 29.4% Share of Australian goods and services exports bought by China in 2025 | 6% Typical VAT rate withheld on services sold into China | RMB 26,000 Annual cross border e-commerce limit per Chinese shopper |
China is Australia’s largest export market, buying more than three times as much as the next largest. Much of that trade is in resources and energy, but services and consumer goods sold directly to Chinese businesses and shoppers carry their own indirect tax obligations.
China’s new Value Added Tax Law took effect on 1 January 2026. Under it, overseas companies carrying out taxable activities in China are subject to VAT withholding whether or not they have a presence there, with the Chinese purchaser acting as withholding agent. A service is treated as sold in China where it is consumed there, so an Australian business advising or supplying a Chinese client remotely can fall within scope.
For most services the rate is 6% and it applies from the first invoice. Unless the contract states whether prices are gross or net of VAT, the withholding comes out of the Australian company’s receipt and the margin on the contract falls accordingly.
Consumer goods follow a different route. For goods sold through cross border e-commerce, the limit sits with the shopper rather than the seller: renminbi (RMB) 5,000 per order and RMB 26,000 per year. Within those limits, import VAT is charged at 70% of the standard amount and collected through the platform. Orders above the limits are treated as general trade and attract full duty and VAT.
| Sales channel | How VAT is collected | Consideration for the finance team |
| Services to Chinese businesses | Withheld by the Chinese customer, typically at 6% | Agree gross or net pricing in the contract and obtain withholding certificates |
| Cross border e-commerce to consumers | Collected through the platform at 70% of the standard import VAT | Keep orders within the per order and annual limits |
| General trade | Full import VAT and duty paid at the border by the importer | Agree who acts as importer and build the full cost into landed pricing |
For the finance team, this means reviewing pricing clauses in Chinese contracts, keeping records of tax deducted at source and deciding which import route each product line should use.
SECTION 5
Where Australian exporters encounter difficulty
Several patterns recur among Australian companies expanding into these markets for the first time.
Assuming the threshold travels. Finance teams used to the A$75,000 GST threshold often assume a similar allowance applies abroad. In the UK, EU and China it does not.
Treating fiscal representation as a formality. An EU registration that depends on a fiscal representative or intermediary is only as stable as that relationship.
Relying on the marketplace for all US sales tax. Marketplaces cover the sales they facilitate. Direct sales remain the company’s responsibility and can still trigger state thresholds.
Signing Chinese service contracts without a VAT clause. Without clear gross or net pricing, the 6% withholding comes straight out of the company’s margin.
Treating registration as a single event. Thresholds, rates and filing rules change. A position that was correct at market entry can fall out of compliance without ongoing review.
Finance team checklist
- Map revenue by country and, in the US, by state against each market’s threshold.
- Confirm whether the EU member states you sell into require a fiscal representative and what the arrangement costs.
- Decide whether IOSS is the right route for consignments up to €150 and who would act as your intermediary.
- Identify which US sales run outside marketplaces and where thresholds have already been passed.
- Check that Chinese service contracts state whether prices are gross or net of VAT.
- Review indirect tax exposure before any funding round, acquisition or sale.
Tax Desk provides indirect tax compliance services for businesses expanding across borders, including VAT, GST and US sales tax registration, filing and ongoing compliance across more than 90 countries. For Australian businesses considering how the issues in this report apply to them, Tax Desk welcomes a conversation.
www.taxdesk.com
This report has been prepared by Tax Desk for general information purposes and does not constitute tax or legal advice. Trade figures are drawn from the Australian Department of Foreign Affairs and Trade and other publicly available sources and should be independently verified. Indirect tax rules change frequently, and Tax Desk recommends a specific compliance review before making registration or filing decisions.
