When Do Online Sellers Have to Register for Sales Tax or VAT Abroad?

How do you work out where you need to register, step by step?

The same six steps work for any online seller, wherever you are based and wherever your customers are. They turn a tangle of rules into a short list of decisions you can make and defend.

• 1. Map your sales by destination country (and US state or Canadian province), channel and product type, in local currency.
• 2. For each market, find who collects today: you, a marketplace, or customs at the border.
• 3. Look up the market's rule for sellers like you on its official site: a threshold, no threshold for non-residents, or physical presence.
• 4. Measure your sales over that market's own period, counting marketplace sales where the market counts them.
• 5. Decide in writing: register now, register voluntarily, watch with a trigger, or not required, with an owner and a review date.
• 6. Set up checkout, invoices, records and a filing calendar before you collect, then review every month.

Who collects the tax: you, the marketplace or customs?

Every cross-border sale has one of three collectors. You, the seller, collect when you are registered in the customer's country or state: you charge the tax at checkout, file returns and pay it over. A marketplace collects when the law treats it as the seller for tax purposes on the sales it facilitates, which is now the case in every US state with a sales tax and, in defined cases, in the UK, the EU, Canada, Australia and New Zealand. Customs collects when goods cross a border and nobody has charged the tax at the point of sale: the importer pays import tax and any duty, and if you ship delivered at place (DAP), the importer is your customer.

Most small sellers have all three at once. Their marketplace sales are collected by the marketplace, their own web store collects in a few places or none, and their parcels to some countries are taxed at the border. Writing down who collects for each channel and market, in a simple table, is the fastest way to find the gaps. A row where the honest answer is 'nobody' or 'not sure' is the first thing to fix.

Two questions catch most sellers out. First, does the marketplace collect on every order type, including sales to business customers who give a VAT number? Get the answer in writing. Second, does the customer know before paying that the courier may ask for more money at the door? If not, expect refused parcels, refunds and return freight that cost more than the margin on the order.

What is the difference between sales tax, VAT and GST?

US sales tax is a single-stage tax on the final sale to a consumer, set state by state and often locally. VAT and GST are multi-stage taxes charged along the supply chain, with registered businesses reclaiming tax on their costs and the consumer bearing the final cost. The EU and UK use VAT; Canada, Australia, New Zealand and India use GST, and Canada adds harmonised and provincial taxes, including Québec's QST.

For an online seller the practical difference is less about the tax and more about the trigger. US states use economic nexus thresholds. The UK and the EU often have no threshold at all for sellers established outside them. Australia, Canada and New Zealand set registration thresholds for non-residents and offer simplified registration.

When does a US state require an online seller to collect sales tax?

Since the US Supreme Court decided South Dakota v. Wayfair in June 2018, states can require remote sellers to collect once their sales into the state pass a level the state sets. The rule applies to sellers based abroad as well as American ones. Each state chooses its own amount, whether a transaction count also applies, and the period it measures over.

Marketplace facilitator laws make large marketplaces collect on the sales they facilitate. That does not always remove those sales from your own count. Washington's Department of Revenue says marketplace sales count towards a remote seller's threshold, and a seller over it must collect on its own direct sales, report all sales including the marketplace's, and claim a deduction for the marketplace's share. New York says marketplace sales should be included in its calculation, and its test needs both a sales figure and a number of sales.

Physical presence still creates nexus on its own. Stock in a third-party warehouse can create an obligation in that state from the first day, with no sales threshold at all.

Do sellers outside the EU and UK need to register for VAT?

Often yes, and from the first sale. The European Commission's one-stop shop guidance explains that the EU-wide threshold for cross-border sales is only available to sellers established in a single member state. Sellers outside the EU selling services, including digital services, to EU consumers use the non-Union scheme. For imported goods in consignments up to the low-value limit, the Import One-Stop Shop (IOSS) lets you charge EU VAT at checkout and file monthly; non-EU sellers usually need an EU intermediary.

From 1 July 2026 the EU also charges a temporary flat customs duty per item line on low-value consignments, applied whichever VAT route the parcel takes, until its new customs data system is in place. The Commission's Access2Markets page sets out how it works.

In the UK, GOV.UK says a business based outside the UK that supplies goods or services there must register regardless of turnover. Overseas sellers of consignments up to the UK's low-value limit sold direct to consumers charge VAT at the point of sale; online marketplaces are liable for the VAT on the sales they facilitate in defined cases.

What about Canada, Australia and New Zealand?

The Canada Revenue Agency's digital economy rules require non-resident vendors of digital products and services to register under a simplified system once sales to Canadian consumers pass a threshold over twelve months, and can treat distribution platforms as the supplier, notably for goods in Canadian fulfilment warehouses. Goods shipped from abroad directly to buyers still pay duties and taxes at import. Québec runs its own QST registration for suppliers outside the province.

The Australian Taxation Office applies GST to low-value imported goods sold to consumers, collected at the point of sale, and requires non-residents to register once GST turnover from sales connected with Australia reaches the threshold. Inland Revenue in New Zealand applies GST to low-value imported goods sold by offshore sellers to New Zealand consumers, with goods above the limit taxed at the border.

A worked example: one seller, six markets

Harbourline Homewares is a fictional six-person seller in Auckland with about NZ$2.0 million of sales in the twelve months to October 2026, 73% of it exported. Here is how the six steps sorted its markets. Thresholds are those on the kit's dated sheet, correct at November 2026.

• Past UK VAT: £60,800 of sales since January 2025, about £10,133 of VAT if prices are treated as VAT-inclusive.
• Same 68-euro parcel to Germany: €86.92 at checkout shipped DDP with IOSS, or €98.92 in total shipped DAP, €30.92 of it at the door (sample carrier fee).
• Business case over 12 months: doing it about NZ$19,000; doing nothing about NZ$2,854 (low), NZ$21,978 (mid) or NZ$49,530 (high). The low case does not pay back; the liability still grows.

What are the most common mistakes?

Most mistakes come from treating one true statement as the whole answer.

• Assuming the marketplace handles everything, when some states still count those sales towards your threshold and your own store is yours alone.
• Assuming a home-country threshold protects you abroad, in markets with no threshold for non-residents.
• Moving stock into a warehouse abroad without checking whether it creates an obligation there.
• Letting customers meet import tax and carrier fees at the door, then paying for the refused parcel.
• Typing rates and thresholds from blogs or AI answers instead of the official source, dated.
• Registering quietly to cover a past gap rather than quantifying it and disclosing it with an adviser.
• Sending marketing emails about new prices without checking consent rules such as CAN-SPAM, CASL, PECR and the Spam Act.

How do you keep it running without heroics?

Invoices and records come next. Each VAT or GST system has its own list of what an invoice must show: your tax number for that market, a sequential number, the date, the tax rate and amount, or the reason no tax was charged (export, reverse charge or marketplace collected). Keep the evidence behind every sale and return for the longest retention period of any market you sell to; the European Commission's OSS guidance, for example, asks for ten years.

Once registered, the work is a routine: a monthly 25-minute review of the trackers and returns, a preparer and a reviewer for every return, a monthly reconciliation of one marketplace's tax report, and a quarterly check of the official sources and the What changed log. Give every workstream one accountable owner. Use AI assistants to draft, never as the source of a rate, threshold or deadline.

If your finance team wants to measure its starting point, the AssessAll Indirect Tax and GST Compliance Assessment is one structured way to do it. The Online Seller Sales Tax and VAT Kit from Bodhih Training gives you the workbook, calculator, forms and templates to run the whole method.