Distance Sale Thresholds

Our free automated solution helps businesses track their distance selling thresholds and even apply the right tax rates depending on the customer’s location.

Last updated: 2021-11-22

In 2015 the Organisation of Economic Cooperation and Development (OECD) published updated international VAT guidelines which endorsed many countries to implement new rules of taxing cross-border remote sales based on destination principle, meaning B2C transactions be taxed in the country in which the customer is established if particular distance selling thresholds are exceeded in that country. Remote sales refer to all commercial transactions conducted online, including sale of goods and services.

When to register for VAT/Sales Tax?

If You are selling B2C digital goods and services in Europe, You must register for VAT in a MOSS system once Your distance selling threshold exceeds a threshold of 10 000 EUR in any EU member state.

If You are selling B2C other goods and/or services in Europe, You must register for VAT once Your distance selling threshold exceeds 35 000 EUR – 100 000 EUR depending on a regulations of a particular EU member state.

If You are selling digital goods and services in other countries than EU, You must register for VAT/Sales Tax once Your distance selling threshold exceeds a particular amount depending on a regulations of a particular country, which can be found on our Thresholds Map.

What is considered distance selling?

There are a few different forms that businesses should be aware of and keep records of all sales over a calendar year. If a company is selling above the distance selling thresholds in one or more countries via these methods, then they must register for VAT:

  • Your website. Every online sale done through an independent domain or a specific product service is considered to be a distance sale.
  • Marketplaces. Businesses selling through online marketplaces like Amazon are also doing distance sales.
  • Online auctions. The same distance selling regulations apply to internet auction sites like eBay, eBid, Bonanza, etc.
  • Outbound sales or Telesales. This is one of the oldest forms of distance selling. Businesses are required to provide accurate product details and all contract terms. Later a written version must be provided.
  • SMS. Quite a rare method, but any purchases done via SMS is distance selling too.
  • TV. This involves television shopping networks, in-TV movie rentals, and any kind of interactive TV program from which users can purchase goods.

Tracking Your cross-border B2C sales and checking whether it exceeds distance selling thresholds in different countries is a demanding job. Our automated solution can help you do it quickly and easily.

Regulations in Europe

Distance selling involves sales and purchases done via online mail orders services and includes both physical and digital goods & services. This particularly applies to products that cross EU country borders to reach the buyer.

Usually, one must register for VAT when they open a business and/or store their products in a European warehouse. This is also necessary when the annual distance selling thresholds are exceeded in a specific EU country.

Every EU country has an individual threshold limit, which ranges from 35,000 € to 100,000 € per calendar year. Once it is reached, the seller must get an additional VAT number in that specific country where the goods are being imported or held. There are also certain rules and regulations called Distance Selling Regulations (DSRs) that businesses should be aware of and comply accordingly. Sellers have to provide customers with:

  • Pre-Purchase Information;
  • The right to cancel the order within 7 days;
  • The right to have the products provided within 30 days after the order is sent (unless agreed otherwise);
  • Refunds if the goods aren’t delivered on the agreed date;
  • Refunds if the payment wasn’t authorized;
  • Written information after the purchase of goods or services.

There are exceptions when it comes to B2C and B2B. With B2C, not selling above the 10,000 € limit within one calendar year means that local VAT rates apply to the sales. When the distance selling thresholds are exceeded then the VAT rate of the destination country is charged. This limit changes which VAT rates are applied but this can easily be tracked with our automated systems. With B2B, it is quite simple as these thresholds don’t apply to these sales. It also doesn’t apply to such excisable goods as tobacco, alcohol, and petrol.

While these regulations are meant to protect the consumers, the thresholds are designed to encourage companies to trade across Europe while also reducing the administrative burden of doing so. If a business is selling below the distance selling thresholds, they don’t need to register for VAT.

 

Global VAT/GST/Sales tax on digital goods and services

 

Country VAT/GST rate Threshold Filing frequency Implementation for non-residents B2C/B2B Non-residents registration required
European Union (27 member states) 17% to 27% depending on country None (EUR 10,000 for EU companies, none for non-EU companies) Quarterly Jan 2015 (MOSS reforms) and July 2021 (OSS reforms) B2C Yes
Albania 20% None Monthly January 1, 2015 B2C Yes
Algeria 9% None Monthly December 20, 2019 B2C No
Afghanistan 10% AFN 150 million Monthly/ Quarterly December 21, 2021    
Angola 14% None Monthly October, 2019 B2C/B2B Yes
Andorra 4.5% EUR 40,000 Monthly January 1, 2013 B2C Yes
Argentina 21% None (PSP-model: collection and remittance of VAT is executed by the customer’s payment provider) Monthly   B2C  
Armenia 20% AMD 115million Quarterly October 1, 2021 B2C No
Australia 10% AU$ 75,000 Quarterly July 1, 2017 B2C Yes
Azerbaijan 18% AZN 200,000 January 1, 2017 B2C No
Bahamas 12% BSD 100,000 Depends on turnover January 1, 2015 B2C Yes
Bahrain 10% BD 37,500 Quarterly January 1, 2022 B2C Yes
Bangladesh 15% BDT 30 million Monthly July 1, 2019 B2C Yes
Barbados 17.5% None Quarterly December 1, 2019 B2C Yes
Belarus 20% None Quarterly January 1, 2018 B2C Yes
Brazil   Impossition of Imposto sobre Circulação de Mercadorias e Serviços de Tranporte Intermunicipal, Interestadual e de Comunicação is postponed.        
Bhutan 7% BTN 5 million Monthly July 1, 2021 B2C Yes
Cameroon 19.5% XAF 50 million Monthly January, 2020 B2B/B2C Yes
Canada, Federal tax 5% CA$ 30,000 Quarterly July 1, 2021 B2C Yes
Canada, British Columbia 7% CA$ 10,000 Depends on turnover April, 2021 B2C Yes
Canada, Québec 9.976% CA$ 30,000 Depends on turnover January 1, 2019 B2C Yes
Canada, Saskatchewan 6% Nil for non-residents Depends on turnover January 1, 2019 B2C Yes
Chile 19% None Monthly June 1, 2020 B2B/B2C Yes
Colombia 19% None Bimonthly January 1, 2019 B2C Yes
Costa Rica 13% None Monthly August 1, 2020 B2C Not yet. Service providers in scope listed
Ecuador 12% None Monthly September 16, 2020 B2C Not mandatory
Egypt 14% EGP 500,000 Monthly September 1, 2016 B2C No
Fiji 9% FJD$ 300,000 Monthly/Yearly 2020 B2C Yes
Ghana 12.5% GHS 200,000 Monthly January 1, 2014 B2B/B2C Yes
Iceland 24% ISK 2 million Bimonthly November 1, 2011 B2C Yes
India 18% None Monthly July 1, 2017 B2C Yes
Indonesia 11% IDR 600,000,000 Quarterly April 1, 2022 B2B/B2C Not yet
Japan 10% JPY 10 million Annual return/quarterly payments October 1, 2015 B2B/B2C Yes
Kazakhstan 12% None Quarterly January 1, 2021 B2C Yes
Kenya 16% KES 5 million Monthly March 10, 2021 B2C Yes
Kosovo 18% None Monthly September 1, 2020 B2C Yes
Kuwait   VAT was introduced but not applicable yet        
Malaysia 6% MYR 500,000 Quarterly January 1, 2020 B2B/B2C Yes
Mauritius 15% Quarterly/Monthly TBC B2B/B2C Yes
Mexico 16% None Monthly June 1, 2020 B2B/B2C Yes
Moldova 20% None Quarterly April 1, 2020 B2C Yes
Morocco 20% None Monthly B2C Yes
New Zealand 15% NZ$ 60,000 Quarterly October 1, 2016 B2C Yes
Nigeria 7.5% None Monthly February 3, 2020 B2C Yes
Norway 25% NOK 50,000 Quarterly July 1, 2011 B2C Yes
Oman 5% OMR 35,000 Quarterly April, 2021 B2C Yes
Paraguay 10% None January 1, 2021 B2C No
Philippines 12% PHP 3 million Monthly/Quarterly January 1, 2021 B2C Yes
Peru 18% None Monthly 2021 B2B/B2C Yes
Russia 20% None Quarterly January 1, 2017 B2B/B2C Yes
Saudi Arabia 15% None Quarterly July 1, 2020 B2C Yes
Serbia 20% None Monthly April 1, 2017 B2B/B2C Yes
South Africa 15% ZAR 1 million Bimonthly July 1, 2014 B2B/B2C Yes
South Korea 10% None Quarterly July 1, 2015 B2C Yes
Singapore 7% Annual global turnover exceeding SGD$100,000   January 1, 2020 B2C Yes
Switzerland 7.7% CHF 100,000 on global income Quarterly January 1, 2010 B2C, B2B also if registered Yes
Taiwan 5% NTD 480,000 Bimonthly July 1, 2017 B2C Yes
Tajikistan 18% Quarterly January, 2021 B2C Yes
Tanzania 18% TZS 100 million Monthly July, 2015 B2B/B2C No
Thailand 7% BAHT 1,8 million Quarterly September 1, 2021 B2C Yes
Tunisia 19% None January 1, 2018 B2C No
Turkey 18% None Monthly January 1, 2018 B2C (Sales list for B2B trasactions) Yes
Uganda 18% None January, 2020 B2C Yes
Ukraine 20% UAH 1 million Quarterly January, 2022 B2C/B2B Yes
United States Up to 10% Varies by state 2018+
United Arab Emirates (UAE) 5% None Quarterly January 1, 2018 B2C Yes
United Kingdom 20% Quarterly January 1, 2021 B2C Yes
Uruguay 22% None Monthly January 1, 2018 B2C Yes
Uzbekistan 15% None Monthly January 1, 2020 B2C Yes
Vietnam 10% PSP-model: collection and remittance of VAT is executed by the customer’s payment provider Monthly      
Zimbabwe 14.5% None January, 2020 Yes

Canada

Turnover threshold - 30,000 CAD
Standard GST rate - 5% + provincial rate
Measurement period - rolling 12 month period

Chile

Turnover threshold - n/a
Standard VAT rate - 19%
Measurement period - n/a

Argentina

Turnover threshold - n/a
Standard VAT rate - 21%
Measurement period - rolling 12 month period

Austria

Turnover threshold - 10,000 EUR (common EU threshold)
Standard VAT rate - 20%
Measurement period - Calendar year

Australia

Turnover threshold - 75,000 AUD
Standard GST rate - 10%
Measurement period - rolling 12 month period

Bahrain

Turnover threshold - n/a
Standard VAT rate - 5%
Measurement period - n/a

Belarus

Turnover threshold - nill
Standard VAT rate - 20%
Measurement period - rolling 12 month period

Belgium

Turnover threshold - 10,000 EUR (common EU) threshold)Standard VAT rate - 21%
Measurement period - Calendar year

Brazil

Turnover threshold - n/a
Standard VAT rate - 17%
Measurement period - n/a

Bulgaria

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 20%
Measurement period - Calendar year

China

Turnover threshold - 5,000,000 CNY
Standard VAT rate - 16%
Measurement period - rolling 12 month period

Cyprus

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 19%
Measurement period - Calendar year

Colombia

Turnover threshold - n/a
Standard VAT rate - 19%
Measurement period - n/a

Croatia

Turnover threshold - 10,000 EUR (common EU)
Standart VAT rate - 25%
Measurement period - Calendar year

Czech Republic

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 21%
Measurement period - Calendar year

Denmark

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 25%
Measurement period - Calendar year

Estonia

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 20%
Measurement period - Calendar year

Finland

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 24%
Measurement period - Calendar year

France

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 20%
Measurement period - Calendar year

Germany

Turnover threshold - 10,000 EUR (common EU)
Standart VAT rate - 19%
Measurement period - Calendar year

Greece

Turnover threshold - 10,000 EUR (common EU)
Standart VAT rate - 24%
Measurement period - Calendar year

Hungary

Turnover threshold - 10,000 EUR (common EU)
Standart VAT rate - 27%
Measurement period - Calendar year

Iceland

Turnover threshold - 2,000,000 ISK
Standard VAT rate - 24%
Measurement period - Calendar year

India

Turnover threshold - n/a
Standard VAT rate - 18%
Measurement period - n/a

Ireland

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 23%
Measurement period - Calendar year

Italy

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 22%
Measurement period - Calendar year

Japan

Turnover threshold - 10,000,000 JPY
Standard VAT rate - 8%
Measurement period - rolling 12 month period

Latvia

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 21%
Measurement period - Calendar year

Lithuania

Turnover threshold - 10,000 EUR (common EU)
Standart VAT rate - 21%
Measurement period - Calendar year

Luxembourg

Turnover threshold - 10,000 EUR (common EU)
Standart VAT rate - 17%
Measurement period - Calendar year

Malta

Turnover threshold - 10,000 EUR (common EU)
Standart VAT rate - 18%
Measurement period - Calendar year

Netherlands

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 21%
Measurement period - Calendar year

New Zeland

Turnover threshold - 60,000 NZD
Standard VAT rate - 15%
Measurement period - rolling 12 month period

Norway

Turnover threshold - 50,000 NOK
Standard VAT rate - 25%
Measurement period - rolling 12 month period

Poland

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 23%
Measurement period - Calendar year

Portugal

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 23%
Measurement period - Calendar year

Romania

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 19%
Measurement period - Calendar year

Russia

Turnover threshold - n/a
Standard VAT rate - 20%
Measurement period - n/a

Saudi Arabia

Turnover threshold - n/a
Standard VAT rate - 5%
Measurement period - n/a

Serbia

Turnover threshold - 8,000,000 RSD
Standard VAT rate - 20%
Measurement period - rolling 12 month period

Slovakia

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 20%
Measurement period - Calendar year

Slovenia

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 22%
Measurement period - Calendar year

South Africa

Turnover threshold - 1,000,000 ZAR
Standard VAT rate - 15%
Measurement period - rolling 12 month period

South Korea

Turnover threshold - n/a
Standard VAT rate - 10%
Measurement period - n/a

Spain

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 21%
Measurement period - Calendar year

Sweden

Turnover threshold - 10,000 EUR (common EU)
Standard VAT rate - 25%
Measurement period - Calendar year

Switzerland

Turnover threshold - 100,000 CHF
Standard VAT rate - 7,7%
Measurement period - Calendar year

Turkey

Turnover threshold - n/a
Standard VAT rate - 18%
Measurement period - n/a

United Arab Emirates

Turnover threshold - n/a
Standard VAT rate - 5%
Measurement period - n/a

Uruguay

Turnover threshold - n/a
Standard VAT rate - 22%
Measurement period - n/a

Alabama

Economic Nexus - Revenue Rule 810-6-2-.90.03
Effective date - 2018 10 01
Transaction threshold - n/a
Revenue threshold - 250,000 USD
Measurement period - preceding calendar year

Alaska

No Economic Nexus

Arkansas

Economic Nexus - State Bill 576
Effective date - 2019 07 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding calendar year

California

Economic Nexus - NR-18-593
Effective date - 2019 04 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Colorado

Economic Nexus - Emergency Regulation 39-26-105
Effective date - 2018 12 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Connecticut

Economic Nexus - State Bill 417
Effective date - 2018 12 01
Transaction threshold - 200
Revenue threshold - 250,000 USD
Measurement period - 12-month period ending September 30

Delaware

No Economic Nexus

Florida

No Economic Nexus

Georgia

Economic Nexus - House Bill 61
Effective date - 2019 01 01
Transaction threshold - 200
Revenue threshold - 250,000 USD
Measurement period - preceding or current calendar year

Hawaii

Economic Nexus - State Bill 2514
Effective date - 2018 07 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Idaho

Economic Nexus - House Bill 259
Effective date - 2019 06 01
Transaction threshold - n/a
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Illinois

Economic Nexus - Illinois Public Act (P.A.) 100-587
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding 12 months calculated on the last day of March, June, September, and December

Indiana

Economic Nexus - House Bill 1129
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Iowa

Economic Nexus - SF 2417
Effective date - 2019 01 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - immediately preceding or current calendar year

Kansas

No Economic Nexus

Kentucky

Economic Nexus - House Bill 487
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Louisiana

Economic Nexus - House Bill 17
Effective date - 2019 01 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Maine

Economic Nexus - Statute Title 36 M.R.S.A. section1951-B
Effective date - 2018 07 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Maryland

Economic Nexus - MD Emergency regulations (03.06.01.33)
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Massachusetts

Software Nexus - Reg. 830 CMR 64H.1.17
Effective date - 2017 10 01
Transaction threshold - 100
Revenue threshold - 500,000 USD
Measurement period - preceding or current calendar year

Michigan

Economic Nexus - Revenue Administrative Bulletin 2018-16
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding calendar year

Minnesota

Economic Nexus - MN Statute 297A.66, Sub 3(b)
Effective date - 2018 10 01
Transaction threshold - 100
Revenue threshold - 100,000 USD
Measurement period - 12 consecutive months

Missouri

No Economic Nexus

Mississippi

Economic Nexus - MS Rule 35.IV.3.09
Effective date - 2018 09 01
Transaction threshold - n/a
Revenue threshold - 250,000 USD
Measurement period - preceding 12 months

Montana

No Economic Nexus

Nebraska

Economic Nexus - Neb. Rev. Stat. § 77-2701.13
Effective date - 2019 01 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Nevada

Economic Nexus - Nevada Remote Sellers Regulation R189-18
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

New Hampshire

No Economic Nexus

New York

Economic Nexus - Important Notice N-19-1
Effective date - 2018 06 21
Transaction threshold - 100
Revenue threshold - 300,000 USD
Measurement period - immediately preceding four sales tax quarters

New Jersey

Economic Nexus - P.L. 2018, c. 132
Effective date - 2018 11 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

New Mexico

Economic Nexus - House Bill 6
Effective date - 2019 07 01
Transaction threshold - n/a
Revenue threshold - 100,000 USD
Measurement period - preceding calendar year

United Kingdom

Non-local distance selling threshold - 0 GBP
Digital goods threshold - 0 GBP
Standard VAT rate - 20%
Measurement period - rolling 12 month period

North Carolina

Economic Nexus - Directive SD-18-6
Effective date - 2018 11 01 (or 60 days after the threshold is met, whichever is later)
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

North Dakota

Economic Nexus - Senate Bill 2191
Effective date - 2018 10 01 (or 60 days after the threshold is met, whichever is later)
Transaction threshold - n/a
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Oregon

No Economic Nexus

Pennsylvania

Economic Nexus - Sales and use tax bulletin 2019-01
Effective date - 2019 07 01
Transaction threshold - n/a
Revenue threshold - 100,000 USD
Measurement period - preceding 12 months

Rhode Island

Economic Nexus - House Bill H5278
Effective date - 2019 07 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding calendar year

South Carolina

Economic Nexus - Rule 18-14
Effective date - 2018 11 01
Transaction threshold - n/a
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

South Dakota

Economic Nexus - Codified Law 10-64
Effective date - 2018 11 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Tennessee

Economic Nexus - House Bill 667
Effective date - 2019 07 01
Transaction threshold - n/a
Revenue threshold - 500,000 USD
Measurement period - preceding or current calendar year

Texas

Economic Nexus - Rule 3.286
Effective date - 2019 10 01
Transaction threshold - n/a
Revenue threshold - 500,000 USD
Measurement period - preceding 12 months (the initial 12 calendar month period will be July 1, 2018 through June 30, 2019)

Utah

Economic Nexus - State Bill 2001
Effective date - 2019 01 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Vermont

Economic Nexus -House Bill 873
Effective date - 2018 07 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding 12 months

Virginia

Economic Nexus - State Bill 1083
Effective date - 2019 07 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Washington

Economic Nexus - EHB 2163, Chapter 28, Laws of 2017
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

West Virginia

Economic Nexus - Administrative Notice 2018-18
Effective date - 2019 01 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Wyoming

Economic Nexus - House Bill 019
Effective date - 2019 02 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Wisconsin

Economic Nexus - Senate Bill 883
Effective date - 2018 10 01
Transaction threshold - 200
Revenue threshold - 100,000 USD
Measurement period - preceding or current calendar year

Ukraine

Moldova

Albania

Ghana

Kenya

Bangladesh

Malaysia

Uzbekistan

Cameroon

Uganda

Mexico

Svalbard

Armenia

Azerbaijan

Taiwan