VAT for US Sellers: Selling Into the EU and UK

VAT in one paragraph

Value Added Tax is a broad consumption tax (typically 17–25%) that's charged at every step of the supply chain. The end consumer ultimately bears it, and businesses claim back VAT on their inputs. For US sellers, the question is whether you charge VAT to your EU/UK customers and remit it to those tax authorities.

Two big regimes since July 2021

• IOSS (Import One-Stop Shop) — for goods under €150 shipped to EU consumers. One EU registration, single monthly return, customer pays VAT at checkout.
• OSS (One-Stop Shop) — for EU-stored goods or services to EU consumers exceeding €10,000/year combined across all EU countries.

UK is now separate

Post-Brexit, the UK has its own VAT system:

• Goods under £135 sold to UK consumers: register for UK VAT, charge at checkout, remit quarterly
• Goods over £135: usually imported with VAT paid at the border by the buyer (or DDP via your courier)
• UK VAT standard rate: 20%

Marketplaces handle most of it

Amazon EU, eBay, Etsy, and similar marketplaces are generally deemed suppliers for B2C sales under the threshold, and they collect VAT for you. Confirm with each platform — rules vary by sale type.

Digital services / SaaS

Selling SaaS, ebooks, courses, or digital downloads to EU consumers? VAT is due from the first euro. Register under the non-Union OSS scheme (via any EU member state) and file quarterly. Same for the UK at any sales level.

B2B sales — usually reverse charge

If the buyer is a VAT-registered business and provides a valid VAT number, you generally invoice with zero VAT and the buyer accounts for it locally (reverse charge). Validate VAT numbers via the EU VIES system or UK HMRC.

Penalties and enforcement

EU and UK tax authorities are increasingly aggressive about cross-border e-commerce compliance. Late registration penalties + interest can dwarf the original VAT. If you're scaling EU/UK sales, get a VAT advisor early — not after a notice arrives.