As eBay sales increase, we have compiled a guide for sellers about the key information around VAT and sales tax.
As a seller you will be aware that eBay supports the buying and selling of goods and services across various geographic locations, so online trading is simple. You can also choose from a variety of pricing formats, which makes it easy to sell internationally.
However, as you grow sales in other countries, you need to consider your VAT and sales tax obligations.
But don’t panic – at Tax Desk, we help online sellers simplify regulatory compliance around VAT and US sales tax, letting you focus on your shop and your customers.
Why considering VAT and Sales Tax is so important?
If you’ve started to sell into Europe and want to expand into the US then you have a number of different jurisdictions where tax may be due.
As the seller must pay all fees and applicable taxes associated with your account, it means if you don’t register, you miss a registration or fail to file a return, then you could be facing unexpected fines or penalties – all of which will impact your profit.
That’s why having a clear understanding of your tax obligations is crucial.
Whether you’re selling in the UK, the EU or US, you may need to register for VAT or sales tax depending on where your stock is stored and how much you sell each year.
Does eBay give advice on VAT obligations?
eBay recommends seeking professional advice about your tax obligations, if you have an online business. It is advisable to explore partnerships with tax service providers to help you with:
• Registering for VAT
• Registering for sales tax in applicable jurisdictions. While each country is different in Europe, each state is different in the US. Check your US state nexus with our Nexus Checker.
• Filing returns and remitting payments to tax authorities.
• Managing exemptions and ensuring compliance with local tax laws.
It’s important to understand that eBay only gives support on selling and determines the tax rate based on the address and the items purchased. You may still need to register for tax purposes, manage filings and address specific tax-related requirements – particularly if you are selling via a website as well.
Tax Desk supports eBay sellers
Here’s the good news: Tax Desk is here to help you to handle all the VAT and US sales tax obligations. We simplify VAT and sales tax at every step of the way by:
– integrating your data into our system
– automatically pulling your sales data
– registering you in the appropriate countries
– filing returns accurately
– answering any questions you have
Working with us gives you access to our team of experts who will help you avoid mistakes, stress and penalties.
Guide to different taxes
EU VAT
You are required to charge VAT based on the customer’s delivery address in EU countries if:
- you are a seller established in an EU country
- you make sales to non-VAT registered buyers (B2C) in other EU countries
- the total of those cross-border sales exceeds EUR 10,000
To meet this VAT obligation, you will either have to register for VAT in each of the EU countries where you make sales or use the EU VAT One Stop Shop (OSS).
UK VAT – Goods shipped to the UK from abroad
From 1 January 2021, eBay collects VAT on specific orders shipped to UK addresses; this applies to orders:
- valued up to £135 that are sent from outside the UK
- of any value where the item is located in the UK but sold by a non-UK seller
However, for purchases exceeding £135, VAT will be paid directly by the buyer to UK customs authorities.
From 28 April 2022, eBay collects UK VAT from buyers of digital goods (provided electronically to buyers) and will remit that VAT directly to the UK tax authorities.
If a buyer is a VAT registered business, eBay will not collect VAT and responsibility remains with the seller.
US – internet sales tax
If you sell to buyers in the US, you are required to collect applicable Internet Sales Tax on your transactions. As of 1 July 2021 some jurisdictions require the collection of sales tax. In such cases, eBay collects and remits Internet Sales Tax on your behalf.
But if you sell outside eBay you may still need to:
• Track your sales to see where you have “nexus” (a tax presence) in the relevant US state. Check your obligations with our Nexus Checker.
• Register and file in those states.
• Handle sales through your website separately.
eBay seller checklist
As an online seller make sure you establish:
- Which jurisdictions require you to charge and pay taxes.
- Where you need to complete tax registration.
- How to calculate tax for every transaction.
- How to monitor tax exemptions.
- How to submit tax returns by the deadlines.
Speak to the team today
VAT and sales tax don’t have to be scary, using Tax Desk means all the necessary steps can be handled smoothly. Talk to us today.
