Do I need to register for VAT if I sell through online marketplaces?

Do I need to register for VAT if I sell through online marketplaces?

Selling through online marketplaces can feel wonderfully simple: you list a product, a customer buys it, the platform takes payment, and you post the order. But VAT (Value Added Tax) rarely follows the same “set and forget” logic. Whether you need to register for VAT depends on a mix of factors: where you are established, where your customers are, where your goods are located at the point of sale, what you sell, whether you sell goods or services, and how much you sell. Marketplaces can help with some VAT steps and even become responsible for VAT on certain sales, but that does not automatically remove your own VAT responsibilities.

This article explains, in practical terms, how VAT registration typically works when you sell through online marketplaces. It focuses on common scenarios for marketplace sellers: UK sellers, EU sellers, and sellers shipping internationally, including situations where stock is held in fulfilment warehouses. It also covers when marketplaces may be deemed to be the supplier for VAT purposes, when you might still need to register anyway, and how to avoid the most frequent pitfalls.

What VAT registration means in plain English

VAT is a consumption tax charged on most goods and services in many countries. When a business is VAT-registered, it normally must:

1) charge VAT to customers on taxable sales (output VAT), where the rules require it;
2) submit VAT returns to the relevant tax authority and pay any VAT due; and
3) keep appropriate VAT records, including invoices where applicable.

In many systems, a VAT-registered business can also reclaim VAT it has paid on business purchases (input VAT), as long as the costs relate to taxable activity and the usual rules are met. For online sellers, that can include VAT paid on packaging, software subscriptions, professional fees, and sometimes import VAT, depending on how you import goods.

The key point: VAT registration is not “one global thing.” You register in a specific country (or tax jurisdiction) under that jurisdiction’s rules. Selling on an online marketplace can create VAT obligations in more than one country, especially if your goods are stored or shipped from different locations.

Marketplaces can affect VAT, but they do not eliminate your role

Many online marketplaces operate under rules that make them responsible for collecting and remitting VAT in certain circumstances. These rules are often designed to improve tax compliance for cross-border e-commerce and to reduce the risk of VAT being missed when sellers are overseas or hard to enforce against.

In practical terms, this can mean the marketplace calculates VAT at checkout, collects it from the buyer, and accounts for it to the tax authority. In some cases, the marketplace is treated as the “deemed supplier” for VAT purposes, meaning it is treated as if it sold the goods to the customer. You might receive a payout net of fees and sometimes net of VAT amounts handled by the marketplace.

However, even where the marketplace accounts for VAT on particular transactions, you may still have to register for VAT because of other activities or obligations. For example, you might need VAT registration because your overall turnover exceeds a domestic threshold, because you hold stock in a jurisdiction, because you make non-marketplace sales, or because you import goods and want to reclaim import VAT. The marketplace handling VAT on some transactions is not the same as you being “outside the VAT system.”

The first question: where is your business established?

VAT registration rules usually start with where your business is established (sometimes called your “place of establishment” or where you have a fixed establishment). If you are established in the UK, you look first to UK VAT rules and thresholds. If you are established in an EU country, you look first to that country’s rules, and then to how EU cross-border rules apply. If you are outside the UK and outside the EU, your position can be different again, especially if you sell goods that are already located in the UK or EU.

Your establishment matters because many VAT systems have a domestic registration threshold for local businesses, but require non-established businesses to register from the first taxable supply in that jurisdiction. That “no threshold for non-established businesses” rule can catch overseas sellers who start storing goods locally, even if sales are still modest.

UK basics: when UK sellers usually need to register

If you are established in the UK and you make taxable supplies in the UK, you typically need to register for UK VAT once your taxable turnover exceeds the UK VAT registration threshold within the relevant period. Taxable turnover usually includes sales that would be subject to VAT at the standard, reduced, or zero rate. It often excludes VAT-exempt supplies, but the detail matters if you sell a mixture of items.

When you sell through an online marketplace, those sales still count toward your taxable turnover unless the specific rules treat the marketplace as the supplier for those sales and the supplies are not treated as made by you. Even if the marketplace is accounting for VAT on some sales, you should not assume those sales never matter for registration thresholds. You need to look at how the supply is treated in your particular scenario.

For many UK-based marketplace sellers, the biggest triggers for VAT registration are still the usual ones: you grow sales and cross the threshold, or you choose to register voluntarily because it makes commercial sense (for example, you want to reclaim VAT on costs, or you sell mainly to VAT-registered businesses who can recover VAT).

UK basics: when overseas sellers may need UK VAT registration

If you are not established in the UK but you sell goods located in the UK, or you store goods in the UK (including in fulfilment warehouses), you can be pulled into UK VAT. Depending on the exact facts, you may need to register for UK VAT even if your sales are small, because non-established businesses may have to register from the first taxable supply.

Marketplaces can reduce the burden in certain situations by becoming responsible for VAT on specific B2C sales, particularly where the goods are already in the UK at the time of sale and the seller is overseas. But that does not necessarily remove the need for registration if you also make supplies that are not covered by the marketplace deemed supplier rules, or if you have other UK VAT obligations such as imports, B2B sales, or direct website sales to UK customers.

If you store stock in the UK, another issue arises: you may have to account for VAT on stock movements, imports, or transfers depending on how goods enter the UK and how they are then sold. Again, marketplaces may handle VAT on the final sale to the consumer, but the logistics chain can still create VAT touchpoints for you as the underlying owner of the goods.

EU basics: one business, many countries

If you are established in the EU, VAT applies across member states under a shared framework, but each country still has its own registration processes, reporting formats, audit style, and in some cases local requirements. When you sell goods online to consumers in multiple EU countries, you have to consider “distance sales” rules. In simplified terms, VAT is generally due in the customer’s country once you cross certain limits, but the EU has systems to help you manage this without registering everywhere.

One such system is the One Stop Shop (OSS), which allows eligible sellers to report and pay VAT due in multiple EU countries through a single return in their home member state (or another member state of identification, depending on the scheme). This can be helpful for businesses that sell cross-border within the EU without holding stock in multiple countries.

However, if you store goods in more than one EU country, that can create a requirement to register locally in each country where stock is held, because storing inventory can create taxable supplies and reporting obligations in that country. Marketplace fulfilment programmes that place stock across borders can therefore increase VAT complexity, even if they reduce shipping times for customers.

EU sellers and marketplaces: when the platform is treated as the supplier

In the EU, marketplaces can also be treated as deemed suppliers for certain sales, particularly where goods are imported in low-value consignments or where an overseas seller sells goods already located in the EU to EU consumers. If the marketplace is the deemed supplier, it is usually responsible for charging and remitting VAT on that sale to the customer.

But you still need to examine what happens “behind the scenes” between you and the marketplace. Often, if the marketplace is deemed to have bought and resold the goods for VAT purposes, there may be a deemed B2B supply from you to the marketplace and a B2C supply from the marketplace to the consumer. Depending on the rules, your supply to the marketplace might be zero-rated or treated in a specific way, and documentation becomes important. The marketplace may provide VAT statements or transaction reports that support how VAT has been handled.

Even where the marketplace accounts for VAT on consumer-facing sales, you could still need VAT registration if you store stock locally, make direct sales, make B2B supplies, or import goods in your own name. The presence of deemed supplier rules does not automatically mean you can ignore VAT registration considerations.

What matters most: where are the goods at the point of sale?

For goods, VAT is strongly linked to where the goods are located when they are sold and where they are delivered. A marketplace listing alone does not determine VAT. Two sellers can sell the same product on the same platform to the same country, but have different VAT obligations because their stock is located in different places.

Consider these common scenarios:

Scenario A: You sell from your home country and ship directly to domestic customers.
This is usually the simplest case. Your VAT registration position is often driven mainly by your domestic threshold and domestic rules, although the marketplace may still collect VAT in certain setups.

Scenario B: You sell from your home country to customers in other countries, shipping cross-border.
Cross-border rules apply. In the EU, OSS may be relevant. In the UK, there are specific rules for goods imported into the UK and for low-value consignments, and marketplaces may have different responsibilities depending on where the goods are at the time of sale.

Scenario C: You store inventory in a fulfilment centre in the customer’s country.
This is a common trigger for local VAT registration, because holding stock in a country often means you are making supplies in that country. Even if the marketplace handles the VAT on the consumer sale, your presence through stock can create other obligations.

Scenario D: Your goods are imported and delivered by the marketplace or a logistics provider, and you sell to consumers.
Depending on the import process and who is the importer of record, VAT obligations can shift. If you are the importer, you may need VAT registration to account for import VAT and potentially reclaim it. If the marketplace is the deemed supplier, it may account for VAT on the sale, but you still need clarity on who imported the goods and how.

Domestic threshold vs. “no threshold” rules

A lot of confusion comes from mixing two ideas:

1) Domestic threshold: Many countries give locally established businesses a threshold below which VAT registration is not mandatory. That threshold is based on taxable turnover and is designed to ease administration for very small businesses.

2) No threshold for non-established sellers: Some jurisdictions require non-established businesses to register from their first taxable sale in that country. The logic is that the threshold is a relief aimed at local microbusinesses, not a blanket exemption for everyone.

This distinction matters a lot for marketplace sellers because marketplaces make it easy to sell internationally, and fulfilment programmes make it easy to hold stock abroad. You might be under your home country’s threshold, but still need to register in another country because you are not established there and you are making taxable supplies there.

Does selling through a marketplace count as “trading” for VAT purposes?

In most VAT systems, the question is not whether you are “trading” in a general sense but whether you are making taxable supplies as a business. If you buy or produce goods with the intention of selling them repeatedly for profit, that usually looks like business activity. If you are occasionally selling personal items you already own, that can be outside the scope of VAT. Marketplaces blur this line because they can be used both for casual selling and for running a full-scale business.

If you are growing a brand, sourcing inventory, advertising, and turning over stock, you should assume you are operating a business. Once you are in business territory, VAT registration becomes a question of thresholds and cross-border rules, not “whether the platform counts.”

Goods vs. services: digital products and marketplace fees

Many marketplace sellers focus on physical goods, but some sell digital products or services, such as downloadable templates, software licences, online courses, or other electronically supplied services. VAT on digital services can follow different place-of-supply rules than goods.

If you sell digital services to consumers in other countries, you may need to charge VAT based on the customer’s location, even if you are small. Some systems have special schemes to simplify this, but the principle is often that VAT is due where the consumer is. Marketplaces that facilitate digital sales may take on some of the tax calculation and collection, but again you need to know whether the platform is acting as the supplier for VAT purposes or merely as an agent providing payment and listing services.

Also, do not ignore the VAT position of marketplace fees. Marketplaces often charge sellers fees, commissions, or subscription costs. Depending on where you and the platform are based, those fees may be subject to VAT, reverse charge mechanisms, or local VAT rules. If you are VAT-registered, you might be able to reclaim VAT on certain fees (or account for VAT under reverse charge where required). If you are not registered, those fees may become an unrecoverable cost.

When registering voluntarily can be a smart move

VAT registration is not always purely a “must or must not” question. In many countries, businesses can register voluntarily before they are required to. Voluntary registration can make sense when:

You have significant VAT on costs. If you pay VAT on inventory, equipment, packaging, and services, you may want to reclaim it rather than treat it as an expense.

Your customers are VAT-registered businesses. Business customers can often reclaim VAT, so charging VAT may not make you less competitive, while being registered can make you look more established.

You plan to scale quickly. If you are close to the threshold, registering early can prevent last-minute scrambling, pricing confusion, and compliance mistakes.

You import goods and need to manage import VAT. Depending on the country and import method, VAT registration can help you reclaim import VAT or use postponed accounting mechanisms.

However, voluntary registration can be a disadvantage if you sell mainly to consumers and your competitors are not VAT-registered, because you may need to increase your prices or accept lower margins. Marketplaces add another layer: some platforms display VAT-inclusive prices, some allow VAT-exclusive pricing for business customers, and fee structures can affect your margin calculations.

How marketplace “deemed supplier” rules can change your pricing strategy

If a marketplace is responsible for VAT on certain sales, you might wonder whether that means you can list prices without considering VAT. In reality, VAT still affects the customer-facing price and your net revenue. The platform may calculate VAT and show the total price to the customer, but you need to understand how your payout is determined. Some platforms treat your listing price as VAT-inclusive for certain customers or jurisdictions, while others add tax on top. The result can be very different margins for the same nominal listing price.

To manage this, you should:

1) understand for which sales the marketplace is collecting VAT;
2) confirm whether your listed price is treated as tax-inclusive or tax-exclusive in each market; and
3) model your net proceeds after fees, shipping, returns, and taxes.

VAT registration itself also affects pricing. If you are VAT-registered and the marketplace treats you as the supplier for those sales, you may need to set VAT-inclusive prices for consumer markets. If you fail to adjust pricing, you can end up paying VAT out of your margin.

Fulfilment programmes: convenience that can create VAT obligations

Marketplace fulfilment services (where your stock is stored and shipped by the platform or its logistics partners) can be a game-changer operationally. Faster delivery can improve conversion rates, and outsourcing pick-and-pack saves time. But fulfilment can also be the single biggest VAT trigger for cross-border sellers.

The key VAT issue is that storing goods in a country often creates a requirement to register for VAT in that country. Even if the marketplace accounts for VAT on certain customer sales, holding inventory can trigger reporting obligations for stock movements, transfers, and local supplies.

Additionally, if your stock is moved between fulfilment centres in different countries, those transfers can create intra-EU movements, acquisitions, dispatches, or similar concepts depending on the jurisdiction. You might not see this as a “sale,” but VAT systems often treat stock movements across borders as reportable events to prevent tax leakage.

If you use fulfilment across multiple countries, it is wise to treat VAT compliance as part of your logistics design, not as an afterthought. Decisions about where to store inventory, how to replenish stock, and who acts as importer can change your VAT footprint significantly.

Import VAT and customs: why it matters who is the importer of record

When goods are imported into a country, import VAT (and sometimes customs duty) may be due. The party acting as the importer of record is generally responsible for customs declarations and for paying import charges. This matters for VAT because the importer may be able to reclaim import VAT if they are VAT-registered and the goods are used for taxable business activity.

If you import goods in your own name into a country where you are not VAT-registered, you might face a cash flow cost you cannot recover. Alternatively, some systems allow postponed accounting for import VAT, which can ease cash flow but usually requires VAT registration and proper reporting. If the marketplace or a logistics provider imports the goods under their arrangements, that might change what you need to do, but it can also affect your commercial terms and record-keeping.

Many marketplace sellers run into trouble by assuming the platform “handles everything,” while the import paperwork still shows the seller as importer. It is important to align your VAT registration and your import arrangements, so your records and your tax position match reality.

What if the marketplace collects VAT—do you still need to register?

Sometimes yes, sometimes no. Here are a few situations where you might still need to register even if a marketplace collects VAT on some sales:

You exceed your domestic VAT threshold. If you are established in a country with a threshold and your taxable turnover exceeds it, you may need to register regardless of whether the marketplace collected VAT on specific transactions.

You make sales outside the marketplace. If you also sell via your own website, social media, wholesale channels, or other platforms, those sales can create VAT obligations and affect thresholds.

You store stock in a jurisdiction. Holding inventory can trigger local VAT registration, especially for non-established sellers.

You sell B2B or make different types of supplies. Deemed supplier rules often focus on B2C e-commerce. If you sell to businesses, or you make supplies not covered by the marketplace rules, you may still be responsible for VAT.

You need VAT registration to recover VAT on costs. Even if not strictly required, registering may be commercially beneficial if you incur significant VAT that would otherwise be a cost.

The marketplace is not the supplier for your sales. Not all marketplace models and not all transactions are covered by deemed supplier rules. If you are the supplier for VAT purposes, the responsibility to charge and remit VAT can sit with you, which may require registration.

On the other hand, there are cases where marketplace collection of VAT can reduce the need for the seller to register in a specific country for those particular B2C sales—especially for overseas sellers selling goods that are already located in the customer’s country, where the platform is treated as the supplier. But you should verify the exact scope of those rules for your situation.

Common warning signs you might need VAT registration

If you are unsure where you stand, look for these practical warning signs:

You are using a fulfilment programme that stores inventory in one or more countries outside your home base.

You have expanded international shipping and are regularly selling to customers in multiple countries.

You import goods into the UK, EU, or other VAT jurisdictions in your own name or under your business details.

Your sales volume is increasing and you are approaching your home country’s threshold (or you do not have a threshold because you are not established where you sell).

The marketplace asks for a VAT number to maintain account health, access certain selling features, or confirm tax status.

Your marketplace tax settings are confusing and you notice VAT being withheld, added, or treated differently depending on the customer’s location.

You are receiving invoices with VAT on marketplace fees and you wonder whether you should be reclaiming it or applying reverse charge.

These signs do not guarantee you must register, but they strongly suggest you should review your VAT position sooner rather than later.

Record-keeping: what you should keep even if not registered

Good records are essential for VAT compliance, and they also help you make better pricing and cash flow decisions. Even if you are not yet VAT-registered, keep:

Sales records by country. Track where customers are and where goods are shipped from, ideally with transaction-level detail.

Inventory location records. Know where your stock is stored and any movements between warehouses or fulfilment centres.

Import and shipping documents. Keep customs declarations, courier invoices, and evidence of import VAT paid.

Supplier invoices. Keep VAT invoices from suppliers and service providers, including marketplace fee invoices and shipping costs.

Marketplace tax reports. Download periodic reports showing VAT collected, VAT rates applied, and the nature of transactions.

These records will make registration (if needed) far less painful and can protect you if there is a query from a tax authority.

Practical steps to decide whether you need to register

If you want a structured approach, work through these steps:

Step 1: Identify where you are established.
This influences thresholds and whether you are treated as a local business or a non-established seller in each market.

Step 2: Map where your goods are at the time of sale.
List every place your inventory can be located: your own premises, third-party warehouses, marketplace fulfilment centres, or overseas storage.

Step 3: Separate domestic from cross-border sales.
Domestic sales typically follow domestic threshold rules. Cross-border sales can trigger destination-based VAT obligations.

Step 4: Check whether the marketplace is the deemed supplier for your transactions.
Look at the platform’s tax documentation and transaction reports. Determine when the marketplace accounts for VAT and when you do.

Step 5: Review import arrangements.
Who is the importer of record? Who pays import VAT? Who can reclaim it? This affects both compliance and cash flow.

Step 6: Compare your turnover to relevant thresholds and rules.
For your home country, check your taxable turnover. For other countries, check whether a threshold applies to you or whether you might need registration from the first sale due to being non-established or holding stock there.

Step 7: Consider voluntary registration.
Model the impact on pricing and margins, and weigh the benefit of reclaiming VAT on costs against the administrative burden and competitive implications.

What happens if you should have registered but didn’t?

Failing to register when required can create backdated VAT liabilities. That can be painful for marketplace sellers because you may not be able to go back and collect VAT from customers after the fact. If the prices you charged were VAT-inclusive in the eyes of the tax authority, you could end up paying VAT out of your past revenue.

There can also be interest and penalties, and marketplaces themselves may restrict selling privileges if tax requirements are not met. The severity depends on the jurisdiction, the period involved, and whether the failure was careless or deliberate. If you suspect you should have registered, it is usually better to address it proactively rather than hoping it never comes up.

How VAT registration can affect marketplace listings and customer experience

Once VAT-registered, you may need to update marketplace settings, including:

VAT number and registration details shown on invoices or order documents.

Pricing displays (VAT-inclusive vs VAT-exclusive where the platform allows, especially for business customers).

Invoice issuance rules, if the platform provides invoices on your behalf or requires you to upload them.

Returns and refunds treatment, because VAT can need adjustment when orders are refunded.

Depending on the platform, VAT registration may also enable features like VAT invoices for customers, business pricing, or access to certain international programmes. But it can also require closer attention to tax configuration to avoid errors.

Special cases that often trip sellers up

Zero-rated or reduced-rated goods. If you sell items that are zero-rated or reduced-rated in your country, you might assume VAT does not matter. But zero-rated sales can still count as taxable turnover for registration thresholds, and different countries may classify goods differently.

Bundles and mixed supplies. Selling bundles that include items with different VAT treatments can complicate the VAT rate that applies.

Second-hand margin schemes. Some jurisdictions have special VAT schemes for second-hand goods, antiques, and collectibles, where VAT is calculated on the margin rather than the full selling price. Marketplaces add complexity because reporting and documentation must line up with scheme requirements.

Subscriptions and memberships. If you run a subscription box or membership alongside marketplace selling, you could be making a mix of goods and services supplies, each with different VAT rules.

Promotions and vouchers. Discounts, gift cards, and vouchers can change when and how VAT is accounted for.

These are not reasons to avoid VAT registration, but they are reasons to be careful: your product type and selling model can affect how VAT works in ways that are not obvious from the marketplace checkout page.

So, do you need to register?

There is no one-size-fits-all answer, but the decision usually becomes clear once you answer a few concrete questions:

Where are you established?
This determines your home rules and whether you are treated as non-established elsewhere.

Where is your stock stored?
If your goods are stored in a country, you may need VAT registration there, especially if you are not established there.

Where are your customers?
Cross-border consumer sales can require destination-based VAT, sometimes managed through schemes like OSS (in the EU) or through marketplace collection mechanisms, depending on the route.

Is the marketplace the deemed supplier?
If the marketplace is responsible for VAT on certain B2C sales, your obligations for those transactions may be reduced, but you may still have other registration triggers.

How much do you sell?
If you are established in a country with a threshold and you exceed it, registration is often unavoidable.

The safest mindset is this: marketplaces can simplify VAT collection on some transactions, but they do not automatically “cover” your VAT position. You should evaluate VAT registration based on your entire selling operation, not just on what the marketplace collects at checkout.

A simple checklist to take away

If you want a quick final check, use this list:

• You are established in your country and your taxable turnover is approaching or exceeding the VAT threshold.
• You store inventory in another country through a fulfilment programme or warehouse.
• You import goods into a country in your business name and need to manage import VAT.
• You sell cross-border to consumers and may need to account for VAT in the customer’s country (or through an available scheme).
• You also sell outside the marketplace, which can create additional VAT obligations.
• The platform’s tax documents indicate that you are the supplier for VAT on at least some sales.

If one or more of these apply, you likely need to take a closer look at VAT registration requirements in the relevant jurisdictions. If none apply and your sales are small and domestic, you may not need to register yet, but you should still monitor turnover and keep strong records so you can act quickly if your situation changes.

Final thought: treat VAT as part of your growth plan

For many marketplace sellers, VAT registration feels like a “problem for later,” right up until it becomes urgent. The most successful sellers treat VAT as a growth milestone: something to plan for, model financially, and implement cleanly. If you understand where your goods are, how your marketplace treats VAT, and what triggers registration in each market you touch, you can avoid nasty surprises and price confidently.

In short: you might need to register, and marketplaces can help in specific cases, but the responsibility to get the overall VAT position right still sits with you. The earlier you map your selling model to the VAT rules that apply, the easier it is to stay compliant while you scale.