The Ultimate Guide to eBay VAT

The Ultimate Guide to eBay VAT


Selling globally opens your business up to numerous markets but you also become subject to meeting tax thresholds in multiple economies with different rules. That includes a big one for sellers in Europe and UK sellers using eBay: VAT.

Navigating VAT can seem intimidating, but once you understand what it is and if you need to pay it, you’ll be able to sell with confidence.

This comprehensive guide explores everything to do with eBay VAT in the UK and Europe, including what it means for eBay sellers like you, how much it is, how to pay it, and where to get started.

At a glance:

  • VAT is a tax on consumer goods and services
  • If you are based outside of the UK or EU, you must register for VAT and display your number on your eBay listings
  • VAT rates differ by EU country
  • VAT rates can and do change

This article about eBay VAT covers:

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Disclaimer: This article is intended only as a guide and should not replace professional advice and tailored support for your unique circumstances. Use our trusted accountant directory to find an ecommerce accounting professional.

What is VAT?

Value-Added Tax (VAT) is the consumer spending tax in the European Union and the UK. VAT is imposed on goods at each stage of their supply chain—when value is added to them as products, so is the tax.
Unlike income tax, VAT is not taken from sellers but added to the cost of buying an item. It’s a ‘pass-through’ tax, in that the sum should pass through you from buyer to tax authority. You simply hold onto it before you file a tax return—that is, if you need to collect VAT in the first place. 
In Europe, the VAT rate ranges from 17-27% depending on the country, with “parking,” “reduced,” and “super-reduced” rates applicable to certain consumables. These are generally necessities like fuel, heating devices, cleaning products, transport, pharmaceuticals, books, and food.
VAT has different names worldwide with varying rates and rules, but it’s the same concept. In the US, it’s called sales tax, whereas in Australia and New Zealand, it’s called Goods & Services Tax (GST).

Can VAT change?

Yes. It is essential to stay informed about any changes that might affect you. 
In 2017, the UK’s HMRC cracked down on ecommerce tax compliance, making it clear that they would be more strict on the rules moving forward.
After Brexit, there were more changes, and the UK set its own rules, which we’ll cover later.
New tax policies have also sprung up in response to unprecedented events like the Covid-19 pandemic. These policies helped governments deal with the added pressure on businesses with temporary fixes. 

Finally, the 2021 Ecommerce VAT Package saw five significant changes take place for sellers: a pan-EU distance-selling threshold of €10,000, the OSS and IOSS systems, the end of Low-Value Consignment Relief (LVCR), and the introduction of marketplace facilitator obligations.
Given that VAT can and does change, it’s crucial to keep an eye out for anything that might affect VAT in the countries where you have VAT obligations.
If you’re a little uneasy about managing this yourself, don’t worry—there are people and/or apps that can do this for you.

Do I Need to Register to Pay eBay VAT?

Not necessarily. Whether you pay eBay VAT depends on what you sell, where you sell, and how much you sell. According to eBay, a seller may be responsible for:

  • Paying VAT on eBay selling fees (service).
  • Paying VAT on eBay sales (goods).
  • Paying income tax on eBay sales (guide to that here).
  • Informing overseas buyers about import charges (unless you use eBay Global Shipping, in which case, eBay will inform the buyers).

The factors that determine whether you need to register for VAT in any given location are:

  1. The original location of your business (or where you live).
  2. The location of your inventory (there is no threshold for this, any storage counts).
  3. How much you sell.

eBay has partnered with KPMG to offer sellers free education and advice about managing VAT. So, if you are ever unsure of your obligations, there are resources available. 

eBay VAT Registration Criteria

You will need to register for VAT:

  • If you are an established seller in the EU/UK and your business meets the sales threshold of your home country. Some countries have a limit of €0, meaning any trade puts you above the threshold, so you will need to register immediately. 
  • If you are selling goods which are stored in the EU/UK, you are automatically required to register for VAT there—no threshold exists for this. This also counts for sellers based outside the EU storing inventory there.
  • If you sell substantially from one EU country (or UK) to private buyers in another, you might be eligible to pay VAT to the country your buyers live in. This is called distance selling, and there are thresholds for this. 

The best place to start is your home country. Take the time to get to know what’s required of you, the rates of your goods and/or services there, and what might apply to you elsewhere in the EU. 

The Pros and Cons of Registering for VAT

While bigger businesses have no choice but to register for VAT, smaller businesses selling under the thresholds do have a choice. Here are a few other pros and cons you might be interested in as you decide whether to register for VAT. 


  • When smaller businesses register for VAT, they add a layer of credibility and presence which will help them to be taken more seriously by larger companies.
  • Once you’re registered, you don’t have to worry about when you’ll meet the selling threshold. Instead, you can focus on growing your business. 
  • You can claim tax back. Tax-deductible expenses are designed as an incentive for you to grow, so use them. 
  • If structured carefully, VAT can help boost your cash flow, because in most cases you’ll have a few months before you need to hand it over to the government. 


  • Once you are VAT registered, you will need to file returns on a regular basis.
  • Tax apps or accountants are hugely valuable resources, but are still a cost to your business.
  • If you do it yourself and get it wrong, you may be subject to fees and interest. 
  • Yet another thing that you need to manage as a business owner. 

In essence, if you want to grow, you must register for VAT. If you don’t mind stunting your growth to stay under tax thresholds, that’s OK too. That said, many tools are out there to help you manage taxes well and allow your business to flourish.

Distance Selling

Distance selling occurs when goods are sold by a seller in one EU country (or the UK) to a buyer in another EU country (or the UK). For example, a seller in Germany sells a product to a buyer in France.

As it became easier to trade worldwide, across countries and tax jurisdictions, tax authorities needed a way to collect tax on these types of transactions. The result was the introduction of distance selling thresholds. Now, when a seller exceeds a distance selling threshold for a country in a calendar year, they are liable to pay VAT.
As a seller, you need to check where else you might meet VAT thresholds and count as a distance seller.

All EU member states now have the same distance selling revenue threshold of €10,000, making things simpler. Meanwhile, the UK has a distance selling revenue threshold of £70,000.

How Much is VAT?

A picture of euro notes and coins

The applicable VAT rate depends on the country and what kinds of goods and services you are selling. 

If you don’t have inventory in other countries or meet their tax thresholds, you will only need to worry about the VAT requirements of your home country. But if you do have inventory abroad or meet distance selling thresholds, you’re liable.

The EU has a broad set of VAT regulations that its member states adhere to.

The standard rate cannot be less than 15%. They can have up to two reduced rates applicable to certain goods and services but they cannot be less than 5%. Some EU countries are allowed special rates on certain goods and services.

For most of your products on eBay, the standard VAT rate will apply. For a list of the products which may incur reduced rates, check out this guide.

Below is a snapshot of VAT rates for EU member states. It lays out the standard VAT rates, plus the thresholds that you would need to meet to pay taxes both as a resident, and distance seller.

Click on the countries for their official sites to register or get the most up-to-date information. 

This table was up-to-date as of December 2022.

CountryVAT Rate*Resident VAT thresholdDistance-selling VAT threshold
Croatia25%HRK 300,000€10,000
Czech Republic21%CZK 1 million€10,000
Denmark25%DKK 50,000€10,000
France20%€85,800 (goods) €34,400 (services)€10,000
Hungary27%HUF 12 million€10,000
Ireland23%€75,000 (goods) €37,500 (services)€10,000
Malta18%€35,000 / €24,000 / €14,000€10,000
Norway (non-EU)25%NOK 50,000N/A
Poland23%PLN 200,000€10,000
Romania19%ROL 330,000€10,000
Sweden25%SEK 30,000€10,000
Switzerland (non-EU)7.7%CHF 100,000N/A
United Kingdom (non-EU)20%£85,000£70,000

Sources: Avalara European Union

*The “standard rate” without any exemptions or reductions applied.

Where do customs charges and import tariffs fit in?

If you are registered for VAT in Europe and you sell to customers outside of the EU, any applicable taxes will be picked up at the buyer’s end.

You don’t need to charge VAT on those purchases, because customs will apply any fees or tariffs which the buyer will have to pay in order to pick up the item. 
The same goes if you are outside of the EU and selling to customers there. For example, if you sell from eBay in the US to a customer in the UK, you will not apply UK tax.

Instead, UK customs will ask the recipient to pay any necessary import charges before they collect the item. 

Low-value consignments (less than €150) can be tracked via the Import One-Stop Shop system. This makes customs faster, charges more transparent for customers, and a smoother process all-round.

These are simplified examples—every seller will have unique circumstances. It is important to get tailored advice from an accountant where possible. 

The UK: What’s Changed Since Brexit?

If you are new to ecommerce and just learning the ropes now, rules changing for the UK won’t mean much to you. But if you’ve had nexus there for a while, you will likely need to change something about your VAT remittance.

In 2021, new rules came into play:

  • For consignments (orders to your customers) entering the UK worth less than £135, VAT is now charged at checkout rather than at import.
  • The Low-Value Consignment Relief, which excluded goods under £15, has been scrapped.
  • If the seller has a UK VAT number, they may be able to claim back VAT paid on import, after orders have cleared customs.

What sellers need in order to comply with the new UK VAT laws:

  • A UK VAT number if you have business there. For B2B businesses, if the UK shopper provides their own UK VAT number then this is not required.
  • All businesses need to collect VAT at the point of sale for orders of £135 or less. This is the value of the item before anything extra (like shipping, insurance or taxes) is added on top.
  • For orders over £135, VAT should be paid at the point of import.
  • VAT must be remitted to HMRC on a quarterly basis.

Find out more about selling into the UK via online marketplaces from the HMRC website.

How Do I Pay VAT?

Once you know the countries with which you have economic nexus—a substantial link that makes you eligible for taxes—it’s time to register with those countries. 

Use our table in the How Much is VAT section to find the official sites you need. Most of them have English translations, but if not, you may need help from Google Translate or, ideally, an experienced accountant.

NB: As part of the 2021 Ecommerce VAT Package, marketplace facilitators deemed suppliers rules were introduced. What this means for sellers is that the platforms may be responsible for the collection and remittance of VAT in some circumstances. You might find that eBay handles everything for you.

In the cases that it doesn’t, use the below instructions.

What you’ll need to register for VAT

Below are the things you’ll need on hand when registering for VAT in the UK, as an example:

  • Your tax identifier (e.g. national insurance number in the UK), which you may need to apply for as part of the process.
  • Any official business documentation.
  • Any documentation that might relate to previous businesses you have had.
  • Your business bank account details.
  • If you acquired the business, any records of that transfer.

Please consult the official authorities in each country for their unique requirements. The time it takes to get you set up could be a few days or weeks, depending on the country. 

For a non-ecommerce business, it is recommended that during the time you are waiting for your registration to come through, you charge extra to account for VAT in the interim. For you as an eBay seller, however, this probably isn’t necessary.

Pending advice from your accountant, you are better off operating business as usual until you are officially registered, and can then collect VAT the right way. 

Setting up VAT on eBay

Once you have registered for VAT in any applicable countries, you will need to add VAT to your listings, add your number to your eBay account so it displays on listings. VAT cannot be added after a customer has ordered something, so make sure you update listings ahead of time.

Getting an eBay VAT invoice appears to be a real bugbear for many buyers online, so as you go through the process of getting registered, it might be worth taking a moment to learn how to create one

To add your number to your listings, log into your account and go to Account settings then find Site preferences on the left menu.

Screenshot of where to find Site preferences under My Account in ebay

Then, scroll down to Manage VAT numbersand click Edit.

A screenshot of where to add your VAT number in the "Manage VAT numbers" section on eBay

In the pop up, select your country and enter your VAT number, after that click Done.

Alternatively, if you have more than one VAT number, click Add to attach another VAT number.

Adding in your VAT number on ebay using the 'Display your VAT number on listings' box

Once this is done, your VAT numbers will display on your listing pages under Business seller information.

You will need to keep track of how much VAT you collect from buyers. Simply integrating your eBay Managed Payments account with your accounting software won’t do this for you, but by adding A2X into the mix, this will all be broken down automatically. 

So, if you are thinking of self-filing, check out A2X for eBay to see where you can save time, money, and considerable headaches.

Ways to file VAT returns

You have a couple of options when it comes to filing for tax returns. You can either manage this yourself, or you can outsource it to an accountant. Either are perfectly acceptable and of course come with their own pros and cons. 

There is now a One-Stop Shop (OSS) system for sellers that need to file VAT with more than one EU member state. If you wish to, you can use it to file one return for all of Europe. If you don’t want to use this, you’ll need to register with each state and file with them individually.

eBay offers free consultation to its sellers with the help of KPMG. To benefit from this advice, see their contact instructions here.

A2X has a directory of trusted accountants located across the world. If you are interested in talking to an expert on a one-off or ongoing basis, find an accountant here.

To find out the exact due dates of your VAT returns, consult the official pages of the relevant countries. If you are self-filing, it might be worth setting yourself calendar reminders a few weeks out so that the dates don’t creep up on you. 

Your EORI number

Any seller importing products into Europe will need an Economic Operators Registration and Identification (EORI) number. This is required by the EU and also goes for sellers not based in Europe themselves, in certain situations. 

Customs use this number to track and identify cargo as it is imported, and if the number is missing, they may hold cargo at the border and charge you for storage until you provide it. 

You also need this number to move goods between the UK and EU. 

You can apply for the number in your home country. Use our table to find links to the customs websites for each country. EORI numbers can be processed within 48 hours but may take a few days.

Why use tax apps for automating eBay VAT returns

Feeling a little overwhelmed by the thought of handling all this yourself? Fortunately, numerous apps have been designed and created specifically to alleviate this problem. 

Companies use tax apps to automate the tracking of:

  • Sales thresholds
  • Tax liabilities
  • Tax returns and filing
  • Other charges to customers

Your goal as an ecommerce seller is probably to grow as quickly as you can, so it makes sense to have solid foundations in place that can support this. 

Charging VAT on eBay items requires an agile system and strategy. You need to know how much you collected from whom in order to pay it back to the right place, and you need to stay up-to-date on requirements, rates and changes. 

Tax apps do all this for you.

Most will integrate with your accounting software so that everything becomes automatic. And, if you sell on more channels, they can bring all your information together for you in one place. In many cases, if one of your channels meets a tax threshold, it automatically deems your other businesses liable for tax too. 

Check out these tax apps which integrate with the most popular accounting software and A2X, to ensure VAT accuracy and success every year. 

VAT on eBay vs. VAT on Amazon (and Other Platforms)

VAT is not something imposed by marketplace facilitators. It’s determined and administered by the government, so in essence, dealing with VAT is similar no matter which platform you use.

It’s the location and quantity of your sales that makes the difference.

There are variations however, in the types of support available. For larger sellers that have to deal with a multitude of rates and returns, this could be significant. 

Amazon offers more fulfillment options for Europe than eBay, and its fulfillment extends beyond Amazon products. So, if you sell on both Amazon and eBay, you should be able to rely on FBA for all your fulfillment across both channels. This is an advantage of selling on Amazon. 

Remember how one of the criteria for registering for tax is storing inventory in a European country? Well, by using Amazon’s FBA system or eBay’s Global Shipping Program, you won’t need to worry about that piece of the puzzle. So again, if you can put all your eggs in the FBA basket, this might streamline your processes. eBay’s GSP will only ship eBay items. 

If you do sell on Amazon and would like more information about choosing your best fulfillment option, check out our guide here on VAT for Amazon sellers

Aside from fulfillment options which save you from one of the registration criteria, collecting VAT on eBay items and collecting VAT on Amazon items is essentially the same. Costs should be added before completion of sale, and depending on the locations of both you and your buyers, you will need to pass on that VAT to the relevant tax authority.


How do I avoid VAT on eBay? 

As a seller, the only way to avoid your legal obligation to collect VAT is by staying under the thresholds for VAT collection (seen in the table above). Once you go above these thresholds you have a responsibility to charge VAT on your listings and must collect them. 

Depending on the size of your business, your country of residence, and whether or not you sell outside of your home country, you may never meet the VAT threshold so you can avoid VAT. 

Do you pay VAT on second-hand goods on eBay? 

VAT is a pass-through tax and applies whether the goods you sell are brand new or second-hand.

What items are VAT exempt in the UK? 

There are a few goods and services on which VAT is not charged:

  • insurance, finance and credit
  • education and training
  • fundraising events by charities
  • subscriptions to membership organisations
  • selling, leasing and letting of commercial land and buildings — this exemption can be waived

Find Your Accountant with A2X

Here at A2X, we work with some of the best in ecommerce accounting so that we can offer our customers the full end-to-end support they need. 

Head to our directory to filter through our accountants, based on where they are, their offerings, and their tax expertise.

Use A2X to integrate your eBay store with QuickBooks or Xero. Try it free!

Also on the blog

Learn how to manage your eBay accounting the right way

Accounting for eBay sales comes with a unique set of challanges and opportunities. Discover the key challenges sellers face, the taxes and fees, and a free setup checklist.

Download our free guide
eBay Accounting 101

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