VAT, GST/HST & US Sales Tax Guide for Online Sellers

Ecommerce makes it easy to sell to customers in dozens of countries from day one. Tax authorities have caught up: in most major markets, indirect taxes such as VAT, GST and sales tax follow the customer, not the seller. Here's what that means in the four regions we work with most.

Thresholds and rules change regularly. Treat this guide as an overview and confirm your position with a tax adviser before registering or filing.

United Kingdom: VAT

• UK-established businesses must register for VAT when taxable turnover exceeds £90,000 over a rolling 12-month period (the threshold since 1 April 2024).
• Non-UK established businesses generally have no registration threshold — registration can be required from the first taxable UK sale.
• Online marketplaces are responsible for VAT on some sales made through their platforms, which can change who must account for the tax.
• VAT-registered businesses keep digital records and file returns through Making Tax Digital-compatible software.

European Union: VAT and the One-Stop-Shop

• Cross-border B2C sales of goods and certain services to consumers in other EU countries are taxed in the customer's country once your total EU cross-border sales exceed €10,000 a year.
• The One-Stop-Shop (OSS) lets you declare and pay that VAT through a single quarterly return in one EU member state.
• The Import One-Stop-Shop (IOSS) covers imported low-value consignments of up to €150.
• Non-EU sellers can use the OSS and IOSS schemes too, sometimes via an intermediary.

Canada: GST/HST and provincial sales taxes

• Canadian businesses generally must register for GST/HST once taxable supplies exceed CA$30,000 over four consecutive calendar quarters (the "small supplier" threshold).
• Many non-resident sellers of digital products, services and goods shipped via fulfilment warehouses fall under a simplified GST/HST registration regime.
• Some provinces, such as British Columbia, Saskatchewan, Manitoba and Québec, have their own sales tax rules that may also apply.

United States: state sales tax and economic nexus

• There is no federal sales tax; each state sets its own rules, and many local jurisdictions add their own rates.
• Since the South Dakota v. Wayfair (2018) decision, most sales tax states apply economic nexus — commonly US$100,000 of sales into the state in a year, with some states also using a transaction-count test.
• Marketplace facilitator laws often require platforms such as Amazon to collect tax on your behalf, but you may still need to register for direct sales from your own store.

A practical checklist for cross-border sellers

1. Map where your customers are and your annual sales into each country or state
2. Compare each figure with the current registration threshold
3. Identify sales already handled by marketplaces
4. Register where required and set up your ecommerce platform to charge the correct tax
5. Reconcile tax collected against your accounting records every month
6. Review your position at least quarterly as sales grow

How Avore Solutions can help

Our taxation and regulatory compliance team handles VAT registration and returns, cross-border tax compliance and multi-jurisdictional tax planning for businesses selling into the USA, UK, Canada and Europe — and our Shopify and ecommerce developers can make sure your store calculates tax correctly at checkout.

Frequently asked questions