From VAT registration thresholds in the EU and UK to state-by-state sales tax in the U.S., indirect tax compliance has become one of the most complex operational challenges for online sellers. The more you grow, the more jurisdictions, platforms, and product types you need to manage and the higher the risk of errors, penalties, or missed filings.
This guide breaks down what you need to know about e-commerce indirect taxes, including:
Whether you're selling into Europe, expanding across the U.S., or doing both this guide helps you reduce risk, lower admin, and stay ahead of regulatory change.
Why managing indirect taxes for e-commerce businesses becomes more complex as your business grows
As you scale, more products, more platforms, more countries, indirect taxes like VAT and sales tax stop being a line item. Suddenly, you’re dealing with different tax rates, VAT rules, filing obligations, and platforms that all manage tax in their own way.
For a deeper dive, read Navigating E-commerce Tax to Enable Global Business Growth.
An online store shipping to the EU has to deal with VAT rates in multiple countries, likely register under OSS, and get invoices right or risk fines. Selling into the U.S.? You’re suddenly liable for sales tax in each state where your revenue passes a certain threshold. That could be 50 different sets of rules. Plus, tax rates vary depending on what you sell combined with where your customers are. Physical goods, digital products, or services? Some items are zero-rated, some exempt, and others vary entirely by region.
Learn how to automate VAT and scale sales tax calculation.
For example, if you’re running both a Shopify store and a marketplace like Amazon, tax works differently in each one. Marketplace facilitator laws might cover some obligations, but not all. You still need to track what’s collected, where you’re registered, and how your e-commerce, ERP, and finance systems will handle it.
See how Vertex for Marketplaces can help or explore our partnership with Shopify.
If you’re still using spreadsheets to manage e-commerce business taxes, you’re exposing your business to mistakes and risk. Misapplied VAT rates, late filings, missed registration thresholds, even audit exposure a potential outcomes. If you’re also filing for corporation tax or income tax off the back inadequate transaction data, you could be overpaying or under-declaring without knowing it. Today, automation is essential.
Take a look at how Vertex O Series helps e-commerce businesses manage indirect tax at scale with real-time accuracy across every platform, product, and region.
If you’re selling cross-border, VAT compliance is a constantly shifting set of rules that can trip up even experienced e-commerce businesses. From registration thresholds to invoicing standards, staying compliant takes more than applying a tax rate at checkout.
Learn more about VAT compliance.
In the EU, once your cross-border B2C sales pass the 100,00-euro annual threshold, you're required to register for VAT. Many e-commerce sellers choose the OSS scheme, a single EU registration that lets you report and remit VAT across multiple countries through one return.
Learn more about complying with VAT & e-invoicing regulations.
For goods sold into the EU from outside including the UK and US, the IOSS simplifies VAT collection on low-value consignments under 150 euros. It lets you charge VAT at checkout, avoiding customs delays and surprise charges for your customers at the point of delivery.
Learn more about the difference between OSS and IOSS.
Since Brexit, the UK has its own VAT system. UK sellers can no longer use OSS for EU sales. You may need to register separately in each EU country, or work with an intermediary. Non-UK businesses often need a UK VAT number to sell to UK customers without disruption.
Find a VAT solution that can support your global business needs.
If you're selling to businesses B2B in the EU or UK, VAT often isn’t charged at the point of sale due to reverse charge rules. For B2C, you must apply the correct rate and issue a compliant invoice. Invoicing standards vary by market, product, and customer type.
Learn more about VAT compliance & registration.
A German seller might use OSS to file VAT for France, Spain, and the Netherlands in one return. A US seller may use IOSS for EU parcel VAT. A UK brand might manage multiple registrations. Whatever the case, stay registered, charge correctly, and file on time.
Read our marketplace e-guide for more information.
How businesses can streamline e-commerce tax management
The first step in simplifying taxes for e-commerce business operations is consolidating your data. Most online businesses sell across multiple platforms including marketplaces, direct websites, apps, even point-of-sale systems. Each generates its own transaction records and tax implications.
Bringing that data together in one place through a tax engine integrated with your ERP, e-commerce, and accounting systems allows for faster, more accurate reporting, and reduces the risk of gaps in your tax returns.
Manual processes don’t scale. The more jurisdictions you operate in, the more rates, rules, and exemptions you need to apply. This creates room for errors and missed filings.
Automation takes care of real-time VAT rate calculations, multi-country filings, and even VAT return preparation all of which reduce administrative overhead and human error.
Explore how Vertex O Series supports indirect tax automation for complex e-commerce business taxes.
As your business expands, so should your tax governance. That means creating a clear internal model that defines responsibilities, outlines escalation paths, and ensures consistency across regions. Whether you're a small business growing fast or an enterprise entering new markets, a centralised tax governance model makes it easier to scale without losing control.
Support this with strong documentation: process maps, submission timelines, audit prep checklists with each aligned to the regulatory environments you operate in.
A strong tax governance model is only as good as your team’s ability to execute it. Vertex University and the Tax Software Training program provide structured learning from beginner-level how-to material to advanced sessions on compliance workflows, ERP integrations, and e-invoicing mandates.
Ongoing training ensures your tax and finance functions are ready not reactive. Experience all that our world-class training has to offer.
Future-Proofing Your E-Commerce Tax Strategy
Regulations are shifting. In the EU, ViDA (VAT in the Digital Age) could introduce real-time invoicing and cross-border reporting changes. In the U.S., more states are tightening economic nexus rules. Keeping up means tracking government updates, joining industry forums, and subscribing to expert alerts and not just reacting when rules change.
Get ahead with our guide to EU e-commerce VAT rules.
The best e-commerce indirect tax strategies don’t just solve today’s problems, they scale with growth.
Internal audits help you catch risks early. Review your e-commerce business taxes, regional rules, and data flows regularly. These check-ins keep your filings clean and your team confident if a real audit hits.
Tax, finance, and digital teams can’t work in silos. Keep lines of communication open so that everyone is working from the same compliance playbook. When teams are aligned, tax isn’t just reactive. It’s ready.
Indirect tax isn’t just a finance issue, it’s a growth issue. As your e-commerce business scales, so does the complexity of VAT, sales tax, and regulatory compliance. Without the right systems in place, managing this manually can lead to rising costs, mounting risk, and serious strain on internal teams.
Vertex’s automation solutions are designed to take the pressure off. From real-time tax calculation and cross-border VAT return management to deep integration with your e-commerce and ERP platforms, we help ambitious businesses stay compliant, accurate, and audit-ready, at scale.
Vertex offers proven tools tailored for your market.