How do US sales tax obligations change when I expand to Canada, the EU, or the UK?

International expansion adds a new tax layer on top of US obligations, it doesn’t replace or simplify them. US sales tax continues to apply to all transactions sourced to US addresses. What changes is that you now have separate, parallel tax systems to navigate in each country you enter.

The good news: the US sales tax system, despite its complexity, is the most mature and well-tooled compliance environment for eCommerce. The foreign systems have their own complexity but are generally administered at the national level with fewer jurisdictional variations.

What stays the same: US obligations

Every transaction shipped to a US address continues to be subject to US sales tax rules. Your nexus footprint, filing obligations, and AutoFile configuration don’t change because you also sell internationally.

A US transaction (ship-to US address) is a US sales tax event, full stop. A Canadian transaction (ship-to Canadian address) is a Canadian tax event. They’re independent.

Canada: GST/HST and provincial sales tax

Federal GST/HST: Canada’s federal consumption tax is the Goods and Services Tax (5% in non-HST provinces) or the Harmonized Sales Tax (combines federal and provincial rates in Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island, rates range from 13% to 15%).

US sellers are required to register for GST/HST when their worldwide taxable sales exceed CAD $30,000. The threshold is lower than US economic nexus thresholds. A US brand with a relatively modest Canadian customer base may cross it sooner than expected.

Registration is with the Canada Revenue Agency (CRA). A single GST/HST account covers federal tax in most provinces.

Provincial sales tax (PST): Three provinces (British Columbia, Saskatchewan, and Manitoba) have separate provincial sales tax systems not harmonized with the federal GST. Quebec has the Quebec Sales Tax (QST), also separate. These require separate registration and filing in each province.

For a US brand primarily selling through Amazon Canada, Amazon may handle GST/HST collection as a marketplace facilitator, but PST obligations may still fall to the seller depending on the province. Verify with a Canadian tax advisor.

Customs and import: Shipments from the US to Canada are subject to customs duties depending on product classification and value. The Canada-US-Mexico Agreement (CUSMA) provides duty-free status for many US-origin goods. Canada has a de minimis threshold of CAD $40 for duties and CAD $150 for taxes on commercial shipments, shipments below these thresholds may be exempt.

EU: VAT and the One Stop Shop

EU VAT basics: EU VAT is a national consumption tax that applies to sales of goods and services to EU consumers. Standard rates vary by member state (typically 20–25%). Unlike US sales tax, VAT is a value-added tax, businesses collect it and remit the difference between input VAT (paid on purchases) and output VAT (charged to customers).

The EUR €10,000 threshold: US sellers with EU sales below EUR €10,000/year can choose to register only in one EU member state. Above that threshold, registration in multiple states is typically required, unless using the One Stop Shop.

One Stop Shop (OSS): The EU’s OSS system allows a seller to register in one EU member state and file a single quarterly return covering all EU member state sales to consumers. This replaced the prior system requiring separate VAT registration in each EU country. A US brand with significant EU consumer sales should register for OSS through an EU member state (often Ireland, the Netherlands, or Germany based on business relationships).

IOSS (Import One Stop Shop): For consignment shipments valued at €150 or less shipped from outside the EU, the IOSS system allows the seller to collect VAT at checkout and remit it centrally, rather than the buyer paying VAT at customs. IOSS simplifies the buyer experience and reduces cart abandonment at EU customs. Registration is through an EU member state or through an EU intermediary.

For Amazon EU sellers: Amazon handles VAT collection for marketplace sales below €150 under the marketplace facilitator rules. For higher-value sales or direct-channel EU sales, the obligation falls to the seller.

UK: Post-Brexit VAT

The UK left the EU VAT system at the end of 2020 and now operates its own VAT regime separately. UK VAT is 20% standard rate.

UK registration: US sellers with UK sales above GBP £85,000/year are required to register for UK VAT. For marketplace sales through Amazon UK, Amazon handles VAT collection as a marketplace facilitator for most consumer sales.

Customs: Shipments to the UK are now subject to UK customs duties separately from EU customs. The UK has a de minimis threshold of GBP £135 for VAT, shipments above that value are subject to import VAT handled at customs.

Building the international compliance stack

US sales tax and international indirect tax require different advisors, different software, and different processes:

These don’t converge into one stack. International expansion means building parallel compliance programs in each jurisdiction, using jurisdiction-appropriate advisors and tools.