Selling beyond the UK is a big step for e-commerce exporters, especially if you’re using Amazon’s FBA network. The opportunity is clear – more customers and better margins – but tax and customs rules can trip you up if you don’t plan ahead. In August 2025, UK goods exports fell by 2.7% month-on-month in real terms, driven by a drop in sales to the EU (Office for National Statistics (ONS), 2025). That volatility is a reminder to keep costs tight and compliance clean so your pricing and cashflow stay predictable as you scale.
In this guide, we cover the VAT and customs basics for EU and US expansion via Amazon, explain how the EU’s Import One Stop Shop (IOSS) scheme works for low-value consignments, outline US sales-tax thresholds, and share when to bring in a fulfilment-by-Amazon specialist. If you want hands-on support, our e-commerce accounting services page sets out how we connect your Amazon data to your accounting platform, and our VAT accountant page covers registrations and filings.
EU selling via Amazon: The VAT building blocks
Before you ship a single order to the EU, get the basics in place.
- Economic operators registration and identification (EORI) number: Apply for a GB EORI if your goods move between Great Britain and any other country. If you also move goods into or out of Northern Ireland, you may additionally need an XI EORI. Without the right EORI, customs can delay or hold your shipments (HMRC guidance).
- Commodity codes: Every product needs the correct commodity code on customs declarations. This drives the duty rate and import VAT treatment. Use the UK trade tariff tool to find the right code and document your decisions.
- Origin and duty relief: Preferential zero-tariff rates can apply on UK–EU trade if your goods meet rules of origin and you hold the right proof (for example, a statement on origin). Build this into your product and supplier onboarding (European Commission).
IOSS in plain English – and why UK Amazon sellers still need it
If you ship low-value consignments direct to EU consumers, the VAT IOSS scheme lets you charge the correct EU VAT at checkout and declare it on a single monthly return, instead of leaving customers to pay import VAT on delivery. IOSS applies to consignments not exceeding €150 that are not subject to excise duties. It simplifies customer experience and reduces returns caused by unexpected delivery charges (HMRC).
Here are a few quick pointers for e-commerce exporters.
- Marketplace vs direct: If the goods are sold through an EU-deemed marketplace that opts to use IOSS, the platform may be responsible for collecting and remitting the VAT. Check your Amazon marketplace settings and invoices.
- Stock in the EU: The moment you store stock in any EU country – for example, using Amazon’s European fulfilment network – you generally need a local VAT registration in each country where stock is held, even if you use IOSS for low-value cross-border shipments.
- Northern Ireland nuance: HMRC now allows UK businesses to register for IOSS via the UK to report low-value imports to the EU and Northern Ireland; keep Great Britain-to-Northern Ireland sales on your UK VAT return, not your IOSS return (HMRC).
US sales tax on Amazon: Thresholds and who files what
The US doesn’t have VAT – it has state sales tax. After the Wayfair decision, most states require out-of-state sellers to register if they pass an economic nexus threshold, commonly $100,000 of sales in the state, with the “200 transactions” test increasingly being removed in many states (Tax Foundation).
The good news: marketplace facilitator laws mean Amazon usually collects and remits sales tax on marketplace orders for you. You still need to monitor your own-site sales (Shopify, WooCommerce) and certain non-marketplace transactions that can push you past state thresholds.
Practical steps for UK sellers:
- Threshold tracking: Maintain a simple state-by-state log of gross sales. When you near a threshold, decide whether to register or restrict non-marketplace sales in that state.
- Product taxability: Items like apparel, supplements or electronics can have different rates or exemptions by state. Amazon’s product tax codes help, but you remain responsible for correct mapping.
- Returns cadence: Once registered, file returns as required by each state – monthly, quarterly or annually – even if Amazon collects tax on marketplace sales.
UK VAT and customs basics threading through your global plan
While you’re expanding, don’t lose sight of UK VAT. The standard rate is 20%, with a registration threshold of £90,000 taxable turnover on a rolling 12-month basis, and a deregistration threshold of £88,000. Keep a tight eye on your UK sales and the split between UK, EU and rest of the world.
Make sure your accounting system is set to the following.
- Channel mapping: Separate Amazon marketplaces, countries and VAT rates so your UK return shows the right outputs and EC/overseas sales analysis.
- Import VAT evidence: If you act as importer of record, keep C79 or equivalent import VAT statements and align them to purchase records to reclaim correctly.
- Refunds and adjustments: Credit notes, returns and currency effects can all alter your VAT position. Reconcile Amazon settlements monthly.
Customs paperwork that saves time and fees
Paperwork accuracy is the cheapest freight insurance you’ll ever buy.
- Commercial invoice: Describe the goods plainly, list the commodity code, unit values and currency, origin and Incoterms.
- Incoterms: Pick terms that fit your model. For low-value DDP to the EU with IOSS you’re collecting VAT at checkout; for higher-value consignments, DAP with the customer paying import VAT may be cleaner.
- Evidence of origin: For tariff preferences under the UK–EU TCA, include a statement on origin where you qualify and keep supplier declarations on file.
When to upgrade to a fulfilment-by-Amazon accountant
Here are some signals that it’s time to bring in a specialist.
- Multiple VAT registrations: UK plus one or more EU countries. You’re juggling filings, IOSS and import VAT – coordination pays for itself.
- State-side exposure: Crossing US thresholds. You need a plan for registrations on non-marketplace channels while keeping Amazon filings tidy.
- Data friction: Payouts don’t match sales. You need robust mapping from Amazon settlement reports to your ledger to track fees, refunds and inventory costs.
What to do next
Expanding as e-commerce exporters is about process as much as product. Start with registrations and numbers (GB/XI EORI, UK VAT), confirm commodity codes and decide when IOSS applies to your EU shipments. For the US, rely on Amazon’s marketplace collection where available, but track non-marketplace sales against $100,000 state thresholds and register when you tip over. Keep your UK VAT clean – the standard rate is 20% and the registration threshold is £90,000 – and reconcile import VAT so you don’t leave cash on the table.
There are risks if you delay – unexpected import VAT bills for customers, stock held at the border, penalties for late registrations and distorted margins. Put the building blocks in early and review quarterly as sales mix changes.
If you’re ready to move, book a call and we’ll set out a practical plan to keep your tax and customs compliant while you scale on Amazon with all the VAT and customs basics explained. Talk to us about e-commerce exporters VAT and customs – we’ll get your settings right and your filings covered.
