Cross-Border E-Commerce Sellers
How do marketplace sellers manage VAT compliance when selling to international buyers?
Sellers on cross-border e-commerce platforms must comply with VAT rules in each country where their goods are sold to consumers. In the EU, the OSS scheme simplifies compliance for sellers meeting thresholds. The deemed supplier rules push responsibility to the marketplace in some cases. Sellers must understand when they are responsible for VAT and when the marketplace handles it, and ensure their invoicing is consistent with the actual VAT liability.
When is a marketplace seller responsible for VAT vs the marketplace?
VAT responsibility depends on goods location and seller establishment:
- EU seller, goods in EU, B2C: Seller responsible for VAT unless marketplace is deemed supplier for specific imports
- Non-EU seller, goods imported to EU, low value: Marketplace is deemed supplier; collects and remits VAT
- Non-EU seller, goods already in EU warehouse: Seller responsible if marketplace is not deemed supplier
- B2B sales: Generally seller's responsibility; reverse charge applies to EU B2B sales
- OSS usage: Sellers using OSS register in one EU state and file single return for all EU consumer sales
- IOSS: Import One Stop Shop for imports under EUR 150; marketplace or seller registers, collects VAT at checkout
Frequently Asked Questions
- Does an OSS registration require sellers to issue VAT invoices in each EU country?
- No, OSS simplifies reporting but does not change the VAT invoice obligation significantly. Sellers registered under OSS must issue invoices where required (B2B supplies typically require invoices in the destination country's required format; B2C invoices are optional in most jurisdictions). OSS invoices are denominated in the reporting currency of the OSS registration country. The practical invoice obligation depends on whether the sale is B2B or B2C.
- How do sellers verify if a marketplace will handle VAT on their behalf?
- Marketplaces publish tax policies explaining when they collect VAT on behalf of sellers and when sellers are responsible. Sellers should review the marketplace's tax policy for each country where they sell. For EU sales below EUR 150 from non-EU stock, most major marketplaces have confirmed they collect VAT via IOSS. For sales from EU warehouses, the responsibility varies. Incorrect assumption of marketplace VAT handling can result in seller under-reporting.