A Canadian seller operating on Amazon, Shopify, or Etsy and making sales into the US, EU, or UK faces tax obligations that go beyond what any marketplace handles automatically. The platforms collect and remit in many situations. They do not collect and remit in all situations. And where they do collect, that does not necessarily resolve registration or filing obligations on the seller’s side.
This guide is a compliance overview by jurisdiction. It covers what each major cross-border destination requires from Canadian sellers, what platforms handle versus what remains the seller’s responsibility, and what sellers need to track internally regardless of how much the marketplace handles.
Canadian GST/HST: The Starting Point
Before addressing international obligations, Canadian sellers should have domestic compliance in order. The mandatory GST/HST registration threshold under the Excise Tax Act is CAD $30,000 in taxable supplies, including zero-rated supplies, in four consecutive calendar quarters, or within a single calendar quarter. That threshold is based on revenue before expenses and platform fees, not platform deposits. A seller receiving net payouts after fees may cross the registration threshold without realizing it if they are tracking only what lands in the bank account.
For a full treatment of how GST/HST applies across Amazon, Shopify, Walmart, and Etsy, including which platforms collect and remit on behalf of sellers and which do not, see GST/HST for Multi-Platform Canadian Sellers.
US Sales Tax
US sales tax is the most common cross-border compliance issue for Canadian sellers and the one that generates the most uncertainty. The underlying rule is straightforward. The application is not.
Economic Nexus After Wayfair
Before 2018, US sales tax nexus for a remote seller typically required physical presence in a state: a warehouse, office, or employee. The US Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc. changed the standard. States may now impose sales tax obligations on remote sellers who exceed economic thresholds, without any physical presence in the state.
Nearly every US state with a sales tax has enacted economic nexus legislation following that decision. The most common threshold is USD $100,000 in annual sales into a state, but some states retain transaction-count tests such as 200 separate transactions, and a few use different dollar thresholds. A Canadian seller making USD $120,000 in annual US sales spread across many states may not have crossed any one state’s sales threshold. The same sales concentrated in one state, or made through enough transactions in states that still use transaction-count tests, may create nexus. Which states, in which years, and with what resulting filing obligations requires a state-by-state assessment.
For a detailed treatment of economic nexus and how it applies to Canadian sellers, see US Sales Tax Nexus for Canadian E-Commerce Sellers.
What Marketplace Facilitator Collection Covers
Following the Wayfair decision, US states with a statewide sales tax enacted marketplace facilitator legislation. These laws require large platforms to collect and remit sales tax on behalf of third-party sellers for sales made through their marketplace.
Amazon, eBay, Etsy, and Walmart.com collect and remit sales tax on covered US marketplace sales in jurisdictions where marketplace facilitator rules apply. Shopify is not a marketplace facilitator. Sales made through a seller’s own Shopify storefront are the seller’s responsibility, including collection, remittance, and any filing obligations.
Marketplace facilitator collection handles the remittance function for covered transactions. It does not eliminate nexus. A seller may still have registration or filing obligations in states where nexus exists, even when the marketplace is remitting on their behalf. The specific requirements vary by state.
For Amazon FBA sellers, inventory stored in Amazon’s US fulfillment centers generally creates physical presence nexus in the states where those warehouses are located, independent of the economic nexus thresholds. Amazon distributes FBA inventory across multiple states. A seller whose inventory is placed in an Amazon warehouse in a given state may have nexus in that state from the date Amazon first placed inventory there, regardless of annual sales volume in that state.
What Sellers Need to Assess
Canadian sellers with US sales should determine:
- Whether annual sales volume has crossed economic nexus thresholds in any state, using gross sales figures rather than net deposits
- Whether FBA inventory placement creates physical presence nexus in states where economic nexus thresholds have not been reached
- Whether any sales are made outside a marketplace facilitator platform, such as through a direct Shopify store, for which no marketplace collection applies
- What registration or filing obligations exist in the states where nexus has been established
EU VAT
The European Union reformed its VAT rules for e-commerce in July 2021. The reform eliminated the prior low-value import exemption, expanded the circumstances under which marketplaces are treated as the deemed supplier for VAT purposes, and introduced two registration schemes relevant for sellers shipping goods into the EU.
The One Stop Shop and the Import One Stop Shop
The One Stop Shop (OSS) covers certain B2C services and intra-EU distance sales of goods that are already in the EU at the time of dispatch, for example goods shipped from an Amazon EU fulfillment center to a customer in another EU member state. A Canadian seller is not excluded from the Union Scheme solely because it is not established in the EU; non-EU sellers can use the Union Scheme for certain goods supplies, but they generally need an EU VAT number in the member state from which the goods are dispatched. Direct sales, marketplace sales, and sales where the marketplace is treated as the deemed supplier need to be assessed separately.
The Import One Stop Shop (IOSS) covers distance sales of goods imported from outside the EU in consignments with an intrinsic value not exceeding EUR 150, excluding excise goods. A Canadian seller dispatching goods from Canada to EU customers is selling within the IOSS scope for orders below that threshold. IOSS is not mandatory. However, goods entering the EU from a seller not registered for IOSS may be subject to additional handling fees and VAT collection at the border, which creates a worse experience for the buyer and may result in refused or returned shipments.
Registration for IOSS generally requires a non-EU seller to appoint an EU-based intermediary, unless a specific mutual-assistance exception applies. Guidance on OSS and IOSS is published by the European Commission.
EU Marketplace Facilitator Rules
For sales made through Amazon EU storefronts, Etsy, or other platforms operating as online marketplaces in the EU, the following rules apply:
For goods imported from outside the EU in consignments with an intrinsic value not exceeding EUR 150, the marketplace is treated as the deemed supplier and is responsible for VAT collection and remittance. A Canadian seller dispatching goods from Canada to EU customers through Amazon.de, Amazon.fr, or other EU storefronts at order values below EUR 150 typically has VAT handled by Amazon under these rules.
For orders above EUR 150 imported from outside the EU, normal import VAT and customs rules apply. The buyer may pay import VAT and duty on delivery, or the seller may be responsible if the shipment is structured so that the seller acts as importer of record or ships delivery-duty-paid. In either case, shipment delays and border charges are common friction points at this price range.
For goods already located in an EU fulfillment center at the time of sale, an online marketplace is generally treated as the deemed supplier for B2C marketplace sales made by a seller not established in the EU. A seller using its own direct storefront remains responsible for its own VAT position. Sellers with EU-based inventory should assess their position under the EU VAT rules separately from sellers dispatching from Canada.
UK VAT
The United Kingdom operates its own VAT system, administered by His Majesty’s Revenue and Customs, independent of the EU since January 2021. The structural approach is similar to the EU rules but the thresholds, registration requirements, and administrative processes are distinct.
The £135 Threshold and OMP Rules
For goods sold to UK customers in consignments with a value not exceeding £135, the Online Marketplace (OMP) rules apply when the sale is made through an online marketplace. Under these rules, the online marketplace is generally liable for VAT on the sale. The £135 limit applies to the total consignment value, not the separate value of each item in the consignment. Major marketplace platforms such as Amazon UK, eBay UK, and Etsy usually fall within the online marketplace framework.
For orders above £135 imported from outside the UK, normal VAT and customs rules apply. Import VAT and customs duty may be charged through the carrier or customs process, or handled by the seller if the shipment is structured so that the seller is responsible for import charges.
For goods already located in a UK fulfillment center at the time of sale, the marketplace is generally liable for VAT on marketplace sales made by a seller not established in the UK. The overseas seller remains responsible for any import VAT and customs duty when the goods first enter the UK, and may need or choose to register for UK VAT, including to recover import VAT or where business-customer rules apply. Direct sales of UK-located goods by an overseas seller are different: the seller is responsible for registering and accounting for VAT on those sales, subject to the detailed HMRC rules. HMRC’s guidance for overseas sellers using online marketplaces covers the applicable rules.
The standard UK VAT registration threshold of £90,000 applies to UK-established sellers. Overseas sellers should not treat that threshold as a safe harbour for UK-inventory, direct-sale, import VAT recovery, or business-customer obligations.
What Platforms Handle and What They Do Not
Across all three major cross-border destinations, a consistent pattern applies.
Platforms handle:
- Sales tax and VAT collection on sales made through their marketplace, within the applicable scope rules: covered US marketplace sales in marketplace-facilitator jurisdictions, EU imported consignments not exceeding EUR 150, EU marketplace sales where the platform is deemed supplier, UK imported consignments not exceeding £135, and UK-located goods sold by overseas sellers through an OMP
Platforms do not handle:
- Customs declarations and import procedures when a seller ships inventory to non-Canadian fulfillment centers
- Nexus or registration determinations in any jurisdiction
- Sales made through a seller’s own website or any channel outside the marketplace
- Tax and duty on goods above applicable import thresholds, unless a separate shipping, importer-of-record, or delivery-duty-paid arrangement applies
- Filing obligations in jurisdictions where registration is required even when the marketplace remits on the seller’s behalf
The fact that Amazon, Etsy, or Walmart remits sales tax on a seller’s behalf in a US state does not mean the seller has no filing obligations in that state. It means the collection and remittance function has been assigned to the marketplace for covered transactions. Whether a filing is still required, and what it must report, varies by state.
What to Track
Regardless of how much platforms handle on a seller’s behalf, sellers with cross-border sales need to maintain their own records of:
- Gross sales by destination country and, for US sales, by state
- The platforms through which each sale was made, distinguishing marketplace-facilitated sales from direct sales through a seller’s own storefront
- Inventory locations, including when and where inventory is placed in non-Canadian fulfillment centers
- Annual sales volumes by jurisdiction, to monitor whether economic nexus or registration thresholds have been crossed in any period
These records are the foundation for determining where registration obligations exist and whether they have been triggered. They also support any review of whether the amounts platforms have collected and remitted on a seller’s behalf match the actual transaction data.
Related Guides
- US Sales Tax Nexus for Canadian E-Commerce Sellers covers the Wayfair decision, economic nexus thresholds by state, FBA physical presence nexus, and marketplace facilitator collection in detail.
- GST/HST for Multi-Platform Canadian Sellers covers Canadian GST/HST registration thresholds, collection obligations across platforms, and filing requirements.
- When an E-Commerce Seller Outgrows Basic Monthly Accounting covers how cross-border tax obligations, alongside inventory, multi-channel revenue, and advertising attribution, exceed what basic bookkeeping can track.
- Multi-Channel Reconciliation: Amazon, Shopify, and Walmart covers how to reconcile platform payouts to actual revenue, fees, and taxes collected across multiple channels.
Get in touch if you are selling into the US, EU, or UK and want to review what your current compliance position looks like.