Value added tax (VAT) is also known in some countries as a goods and services tax (GST). It’s an indirect tax that is imposed on any product sold or service provided. Value Added Tax is similar to a sales tax. Generally speaking, it’s a tax on the purchase of goods or services, and payable based on a percentage of the sales price paid by the buyer. In the EU, VAT is included as part of the prices charged to the buyer, and the seller then takes responsibility to remit the VAT to the tax authorities. VAT should only be charged by a taxpayer who is VAT registered.
For example, any eBay seller making sales to DE buyers and fulfilling those orders from DE-based inventory may be required to register for DE VAT, and then charge and remit Value Added Tax on any deliveries made to DE addresses. Speak with a tax advisor to better understand how Value Added Tax applies to your eBay business in the UK or EU and other countries outside the US.
Here are some things you should know if you sell products on eBay.
What are the VAT rates in different countries?
eBay wants sellers to be successful and legally protected, wherever you do business. Registering for Value Added Tax may help you do both those things. Whether you need to register for Value Added Tax depends on the way you conduct your business.
The key factors that determine if you have an obligation to register for Value Added Tax are:
- Your business’s country of establishment
- The location of your inventory
- Your level of sales
It’s each seller’s responsibility to ensure they are Value Added Tax-compliant.
Complete the following steps to ensure you are Value Added Tax-compliant and to avoid potential selling restrictions:
- Register with the local tax authority in each country where you’ve determined you have a Value Added Tax obligation. For example in the UK, register with HM Revenue & Customs (HMRC), the UK’s tax authority.
- Provide eBay with your Value Added Tax ID number, and we’ll automatically add it to all your eligible new listings.
VAT rates vary from country to country. As of April 1, 2023, Hungary has the highest VAT rate at 27%, followed by Denmark, Norway, Croatia and Sweden at 25%. In the EU, standard tax rates range from 17% to 27%. For example, 20% in Austria, Bulgaria, Estonia, France, Great Britain, Russia and Slovakia, and 21% in Belgium, Latvia, Lithuania, the Netherlands, Spain and the Czech Republic. The lowest standard rates are set in Andorra (4.5%), United Arab Emirates (5%), Switzerland and Liechtenstein (7.7%).
Many countries impose this tax on overseas purchases, including items purchased on eBay. Whether the buyer will be required to pay VAT sometimes depends on the price of the order, the location of the item, and the final shipping address.
If you sell to:
Purchases shipped to any of the EU countries are subject to VAT at different rates for each specific country. See the table below for some examples.
|EU Country||Standard VAT Rate, %||Reduced VAT Rate, %|
|Sweden||25||6 / 12|
|Portugal||23||6 / 13|
|Hungary||27||5 / 18|
|Finland||24||10 / 14|
|Greece||24||6 / 13|
|Czech Republic||21||10 / 15|
|Croatia||25||5 / 13|
|Romania||19||5 / 9|
|Slovenia||22||5 / 9.5|
|Latvia||21||5 / 12|
|Lithuania||21||5 / 9|
|Malta||18||5 / 7|
|Cyprus||19||5 / 9|
Reduced VAT Rates apply to goods in certain categories, such as books, magazines, food. A complete list of VAT rates applied in the member states of the EU can be found on the European Commission website.
As of October 1, 2020, VAT is not due when the total value of all goods in a consignment (value not inclusive of customs duties or transport costs) is less than a threshold. The threshold may vary from 10 euros to 22 euros, depending on the EU country:
- Bulgaria - 30 BGN (about €15.34)
- Croatia - 160 HRK (about €20.85)
- Cyprus - €17
- Denmark - 80 DKK (approx €10.75)
- Hungary - 6,000 HUF (about €18.82)
- Romania - €10.
Starting from 1 July 2021 previous VAT exemption for imports of goods has been abolished and VAT is imposed on all imported items, regardless of their value.
Other significant changes to how VAT is collected on imports into the EU, supplies within the EU by non-EU sellers, and cross border supplies by EU sellers include:
- eBay collects and remits VAT for imports of consignments up to a value of €150 shipped into the EU and sold to consumers. Note that for shipments to France, eBay collects VAT on all goods imported regardless of value.
- For goods where the seller is a non-EU business but the goods are already within the EU, eBay collects and remits VAT on ALL sales to consumers within EU countries, and on goods from one EU country to another. There is no threshold.
- All sellers with b2c accounts on regional sites (ebay.de, ebay.fr, ebay.it, etc.) should provide a gross price and separate VAT rate on their listings, so that eBay can determine the correct amount of VAT to collect from consumers.
- EU sellers with an annual turnover of more than €10,000 for their complete intra-EU cross-border supplies have to charge the VAT of the EU country of delivery. The previous distance selling thresholds for intra-EU cross-border supplies is abolished.
VAT on Digital Delivered Goods
From February 7, 2023, eBay began collecting VAT for Digital Delivered Goods (DDG) sold on eBay to buyers located in the EU. eBay remits this VAT to the appropriate Tax Authorities via EU OSS system.
- This change applies to DDG sold on eBay to EU private buyers, regardless of where the seller is base.
- The VAT rate that applies is based on the buyer’s country of residence
- There is no threshold — this change applies for all sales to private buyers. The logic behind collect & remit on DDG is the same as on physical import goods.
DDG in scope include:
- Downloaded software or books
- Streamed content
- Digital content
- Digital games
DDG not in scope:
- Digital gift cards and certificates with a face value & undetermined location/Application
- CO2 Offsets
If you are selling DDG:
- You should ensure you that you enter a gross price and the VAT % you used when determining the prices.
- You will only received the net price as eBay automatically collects and remits VAT from each order. If you are VAT registered, please email your VAT compliant invoice to eBay for the transactions on which eBay has C&R VAT. You should email your VAT compliant invoice to email@example.com referencing the following eBay details:
- For orders where eBay has collected VAT, you will need to report the sale as a transaction to eBay as eBay has taken responsibility for the VAT on the sale to the final consumer.
UK VAT rate: 20%.
As of October 1, 2020, there is a VAT exemption for imports of goods in small consignment of a value of up to £15 into the UK.
From 1 January 2021, the UK has introduced a new model for imports under which VAT is payable on all imports, regardless of values.
The previous VAT exemption is abolished.
eBay collects and remits UK VAT on all imported consignments with a value of up to £135. In cases where the seller is a non-UK business and the goods are already in the UK, eBay collects and remits VAT for goods sold to consumers within the UK, regardless of their value.
Business sellers trading with UK buyers and listing on the UK or any EU site need to provide both gross prices as well as the applicable VAT rate used to calculate the gross price on all listings. If sellers do not specify gross prices and VAT rates, eBay will have to assume that the price provided is the net price, and will add VAT on top of the price displayed to buyers. Sellers should begin listing the applicable VAT rates on all their existing and new listings as soon as possible.
Starting March 1, 2021, eBay has made it mandatory to add the VAT rate on all UK and EU sites when listing items.
Additional VAT resources
HMRC Value-Added Tax guidance for overseas, online retailers
VAT rate in Norway: 25%.
VAT rules similar to those being prepared for the EU and the UK are already in force in Norway. They apply to all eBay sellers who sell products and ship them to buyers in Norway.
VAT on cross-border sales to buyers in Norway applies to low value goods up to a value of NOK 3,000 (shipping, insurance and tax not included). VAT exemptions on imports of low value goods (below NOK 350) have been canceled from 1 April 2020.
Marketplaces, such as eBay, are liable to collect and pay VAT to the Norwegian authorities. When a buyer in Norway purchases an item below a value of 3000 NOK from outside Norway, eBay will add VAT to the order total at checkout. The seller will receive their usual payment for the order value (item price plus shipping costs), and eBay will remit the VAT value to the Norwegian Tax Administration.
VAT on items with a value above 3000 NOK (excluding shipping and insurance costs) is generally paid by the buyer when the goods are released into Norway.
If your annual turnover as a seller is over NOK 50,000 (~ €4500), you must register with the Norwegian Tax Administration.
Australia and New Zealand
VAT rate in Australia: 10%, in New Zealand: 15%.
Goods and Services Tax (GST), similar to VAT, generally applies to all purchases delivered to Australian and New Zealand buyers. For most goods this tax is 10% in Australia and 15% in New Zealand.
For the items purchased outside Australia or New Zealand with a total value up to AU $1,000 (~$700) or NZD $1,000 (~$650) eBay will add GST to the total price at checkout. The seller receives payment for the order value (item price + postage costs), and eBay remits the GST to the Australian or New Zealand Taxation Office.
For imported items valued at over AU $1,000 or NZD $1,000 the GST is generally collected at the Australian border. Buyer may need to pay it as part of clearing their parcel through customs.
There is no VAT in the United States, only sales tax. Tax laws vary between states, and sales tax may be required to be collected by the seller, collected by eBay, or paid directly by the buyer. If the item's being sent from outside the US, the recipient may have to pay duty and customs processing fees. However, consignments under $800 are not subject to VAT or customs duties.
VAT rate in Russia: 20%.
Items purchased on a marketplace outside Russia with a total value up to €200 and weight under 31 kg are not subject to VAT or customs duties. Purchases that exceed this threshold are subject to customs duty paid by the buyer.
Is VAT imposed on my eBay fees?
Depending on your country, the corresponding VAT rate can be applied to your eBay fees.
If you have questions about how to calculate VAT when selling on eBay, or whether paid VAT is deductible, please contact your tax advisor.
I live in Europe, but I sell on ebay.com (USA) and most of my customers are out of European Union. Must I to pay VAT to ebay.com as an additional tax?
Since you are doing business in Europe, you are required to comply with European laws and regulations, as well as those in your own country. The eBay sites in Europe (such as ebay.sp, ebay.co.uk, ebay.de, etc.) are set up with the correct processes to help sellers meet these requirements. Learn more
Do I need to inform a buyer overseas about import charges?
Yes. Buyers are responsible for paying import fees, usually as part of clearing their parcel through customs or when they receive their item. If you offer international shipping, you can’t include these costs in the item’s purchase and shipping price. Make sure to let international buyers know this in your listings.