Sales tax in the United States on overseas sales: United States
Summary: etchepare_alu was wondering how to account for his eBay sales of items to the United States, taking VAT into consideration since eBay collects and remits sales tax. francois-o replied, confirming that for sales to countries outside the European Union, such as the United States, there is no VAT to charge. He also advised recording the sale at €136 excluding tax, while recommending consulting a chartered accountant for more precise guidance.
Hello,
I’m a professional and I started selling items on Ebay, and against all expectations I have buyers in the United States. I have no problem with shipping, but with the accounting record for my sale. My item is sold for €136 incl. VAT (so I receive €136 minus Ebay fees), on which Ebay adds a sales tax that it remits to the authorities. So since you can’t pay VAT twice on the same item and Ebay recovers it, I’d say that, from an accounting standpoint, I have to record my sale without VAT, so at €136 excl. VAT?
If anyone has a little opinion on the VAT rate to apply to sales abroad, I’d be grateful.
francois-o
Hello @etchepare_alu ,
When you sell items on eBay as a business, tax and VAT rules depend on the countries involved in the transaction. In general, if you sell to buyers located outside the European Union (EU), you will not need to charge VAT.
eBay collects VAT according to local tax laws, for your buyer, we will add it to their invoice.
On your side, for a sale to the United States => Outside the European Union => No VAT => Recording the sale at €136 excl. VAT (your reasoning was correct 👍😊)
For more details, I advise you to consult a chartered accountant who is best placed to guide you.
Regards
François