At a Glance
US sellers selling into EU countries are obligated to collect VAT from the buyer and then remit the VAT collected to the national tax authorities via VAT return filings.
- VAT is a tax on consumer spending.
- VAT rates vary by EU country.
- It is mandatory that US sellers display their VAT identification number in conjunction with any eBay listing available to an EU resident.
Issue in Detail
What is VAT?
VAT is a tax on consumer spending. When a VAT-registered seller makes sales to buyers located within an EU country, they are obliged to collect VAT based on the country to which the goods are being delivered. This VAT must then be remitted to the national tax authority of that country via VAT return filing. More information can be found on this EU website: EU Guidance on VAT for online sellers
It is mandatory that sellers display their VAT identification number on the eBay site in connection with their listings. This can be done by updating their business seller information page, which is explained in our detail in the eBay Seller Centre.
What are the VAT rates for different EU countries?
Goods sold into the EU are generally subject to VAT. VAT rates differ by country and are based on the type of goods sold. You can find more information on the subject here:
When goods are imported into the EU, import VAT and, in certain cases, customs duty will apply. The VAT rate due at import will be the same rate as would be applied if the goods were supplied within the country of import.
More information about EU VAT rules check out these resources:
- General information on VAT
- VAT rates applied in the EU
- VAT changes for eCommerce from July 2021
- Member States of the EU
Important Note: Starting on July 1, 2021 the EU implemented legislation shifting the responsibility for collecting VAT for online purchases from sellers to marketplaces such as eBay in certain circumstances.
What are eBay’s VAT collection and remittance responsibilities?
- eBay is obliged to collect VAT on goods sold through eBay to EU customers in the following circumstances:
- Goods imported into the EU, with a parcel value of up to €150 (Euro). Note that there is no longer a VAT exemption for small consignments up to EUR 22
- Goods of any value sold by a non-EU seller and shipped from inventory stored in the EU. Sellers may still have EU VAT obligations and should consult their tax advisors for further information
If an order fits either of the above criteria, neither sellers nor carriers should collect VAT from buyers in the EU. eBay will collect the VAT from the buyer based on the country of delivery and remit it to the responsible tax authorities.
- If a buyer requires a refund – cancellation, full refund, less than full refund, or partial refund – eBay will refund the VAT to the buyer in cases where eBay collected the VAT on the original transaction.
- eBay is obligated to collect VAT on the full value of the transaction including shipping costs, as the shipping costs are considered part of the total purchase. The VAT on the shipping charges apply at the same rate as the item(s) in the shipment.
- eBay will not collect VAT if:
- Consignment values are above €150. In practice, the recipient pays import VAT to the shipping agent as part of clearing the package through customs.
- The buyer is VAT-registered and provides their valid VAT registration number. In these cases, eBay will not collect VAT and instead the responsibility to account for VAT will switch to the VAT-registered customer.
- Consignments of goods containing excise goods such as alcohol and tobacco are imported into the EU.
- For imports where the buyer is EU VAT-registered and provides their valid EU VAT identification number. In these cases, eBay will not collect EU VAT and instead the respective Customs Authority/carrier will collect upon importation.
- The following chart outlines when eBay is responsible for EU VAT:
|Seller location||Consignment value||Item location at the time of sale||eBay will collect VAT|
|Outside EU||Up to €150||Outside EU||Yes (if the buyer does not have a validated VAT identification number)*|
|Outside EU||Above €150||Outside EU||No (but VAT and duties may be payable by the buyer directly to the Customs authorities/the carrier)**|
|Outside EU||Any value||Inside EU||Yes (if the buyer does not have a validated VAT identification number)**|
*If a buyer has a valid VAT registration number on account, eBay will not collect VAT.
**Additional VAT and duties may be payable by the buyer on delivery. Sellers should check the availability of their duty-paid solutions to ensure seamless buyer experience with their carrier.
- eBay VAT calculation methodology:
- Sellers listing on eBay.com and European eBay sites have the option to provide a gross price and separate VAT rate, so that eBay can determine the net price and correct amount of VAT to collect from consumers.
- eBay will use the values provided by you when listing your items (gross price and VAT rate) to determine the net price.
- eBay will then calculate the VAT payable by the buyer, based on the VAT rate of the item sold in the delivery country.
- eBay will apply VAT to any shipping charges at the same rate as the VAT applied on the item.
- eBay will remit the net amount to the seller, and the VAT amount to the appropriate tax authority.
- For non-EU sellers, unless you have included EU VAT in your pricing calculations, the VAT rate will usually be 0% and may be left blank.
- Margin sellers may also leave the VAT rate blank. As eBay cannot apply a margin scheme, VAT needs to be collected on the full value of the item sold. If you indicate a VAT rate, this may lead to a reduction in the net amount you receive.
- VAT-registered seller - As shipments between the US and EU are considered as export sales in cases where eBay is not responsible for VAT, the prices will also be adjusted to show a net price to buyers. Buyers still need to pay import VAT on delivery.