Managing different tax requirements across borders can feel complicated, but it doesn’t have to be an endless headache. Whether you run a UK-based eCommerce store shipping T-shirts to Spain or a software business providing cloud services to Australia, handling international sales taxes properly is vital. We know you want to stay on top of VAT, goods and services tax (GST), and other regional rules without drowning in red tape. This guide explains key points for the new tax year, highlights common trouble spots, and offers tips for simpler compliance.
Why international sales taxes matter
The UK’s rules on VAT alone can be tricky for businesses that sell abroad. You may have to register in different countries, track multiple tax thresholds, and file returns under local rules. But staying compliant protects your reputation and helps you avoid penalties. When you get this right, you can expand your global presence with fewer hold-ups.
Knowing when you need to register
If you sell goods or services abroad, you must understand when you’re expected to register for VAT or an equivalent tax, like GST, in some countries. For 2025/26 in the UK, the VAT registration threshold remains at £90,000; if your annual UK taxable turnover exceeds £90,000, you must register for VAT with HMRC. Other countries have their thresholds. In some places, any level of taxable sales might trigger a registration requirement.
The situation can differ for digital services, such as software subscriptions or online courses. The EU introduced a special “One Stop Shop” (OSS) for digital services, while the UK, post-Brexit, has separate rules. Many nations also have local digital services taxes. The UK has a 2% digital services tax on certain digital business revenues above £25 million. However, this can change, so check HMRC’s guidance to see if any updates affect you.
Working out what rate applies
Different goods and services often have specific rates, and no single global standard exists. In the UK, most taxable supplies fall under the 20% rate, but some items qualify for reduced rates or exemptions. Other countries can charge anywhere from 0% to more than 20%. It all depends on local legislation. If you use an eCommerce marketplace, you might find the platform automatically calculates tax rates – but don’t rely on that alone. You remain responsible for accurate filings.
Keeping track of thresholds
Another reason to watch your turnover in different regions is that some places apply thresholds to total global revenue, while others only consider local sales. This can catch businesses off guard when they expand quickly. For instance, if you mainly sell in the UK but suddenly have a surge of orders from Canada, that extra revenue might push you past a Canadian GST registration limit. The same might happen in countries like Australia, which applies GST if your annual turnover for that market surpasses AUD 75,000 (around £40,000, though exchange rates fluctuate).
Common pitfalls
- Ignoring local filing deadlines: Different jurisdictions have their own filing and payment schedules. Missing a deadline can result in penalties.
- Mixing zero-rated with exempt goods: Zero-rated items (like most children’s clothing in the UK) carry a 0% charge but still count as taxable supplies. Exempt supplies aren’t taxable at all. Mistakes here can cause errors in returns.
- Forgetting digital services tax: If you sell software, apps, or online services, you may owe a digital services tax in some countries. Don’t overlook this.
- Not charging VAT on B2C services: If you sell to individuals in countries with local VAT or GST rules, you might be expected to charge that tax. Some owners mistakenly think it only applies to goods.
Tips on using technology
Online accounting software has come a long way. Many platforms can integrate with sales channels and create tax rules for each country or region. Automation reduces mistakes and saves time. You can also use tools that track changes in tax laws around the globe, which is helpful when new policies appear at short notice. Look for systems that generate local returns or at least let you export the data you need to file.
We often advise our clients to consider advanced add-ons that inform them of new thresholds. Nobody wants a late-night panic because they missed a rule update in Norway. A bit of automation can bring you real peace of mind.
Working with local experts
Navigating tax rules across multiple countries can be complex, but we’ve covered it. Our team has expertise in international tax matters, ensuring you stay compliant wherever you do business. For example, we help you understand state-level sales tax rules if you trade in the US. We can confirm whether the OSS scheme applies to your business and handle the necessary registrations for EU markets.
We bring clarity and confidence to your global operations, so you don’t have to piece together advice from different sources. Whether you need guidance on expanding overseas or ensuring everything is in order at home before taking the next step, we’re here to help.
Best practices for smooth global sales
- Gather your data: Keep clear records of sales in each country. Note the date, currency, and type of product or service.
- Set up a separate filing calendar: Set deadlines for each region to avoid late filings.
- Decide on local representation: Where needed, appoint a fiscal representative to handle registrations and file local returns.
- Automate your process: Use software to apply correct tax rates and generate reports for each jurisdiction.
- Review regularly: Audit your international tax approach every quarter. Revenue levels can rise quickly, so your obligations might shift in a matter of weeks.
We help businesses across different sectors plan their approach – whether they’re entering a single new market or selling worldwide. You don’t need to handle all of this alone. When you outsource some tax work or lean on tech, you’ll likely stay compliant and reduce day-to-day stress.
Closing thoughts
Managing international sales taxes requires a solid plan. It’s not just about plugging numbers into a system. It’s about understanding thresholds, applying local rates, and staying prepared for changes. With the right tools, expert advice, and accurate records, you can expand globally without falling behind on tax compliance. And once you’ve got a reliable process in place, you can focus on growth instead of chasing deadlines.
Ready to streamline your approach to international sales taxes? Reach out to Blue Shore’s friendly team for tailored advice that fits your situation. We’d love to chat and see how we can help.
