Cross-Border VAT: A Guide for UK Exporters

When you export goods from the UK, the export sale is zero-rated for UK VAT — meaning you charge 0% UK VAT on the invoice. You still report the sale on your UK VAT return but at the zero-rate.

To apply zero-rating, you must have evidence of export — a bill of lading, airway bill, or carrier tracking confirmation showing the goods left the UK. Keep this evidence for at least 6 years.

Important: services exported are different. Exported services to business customers (B2B) are generally outside the scope of UK VAT. Services to consumers (B2C) may still carry UK VAT depending on the service type.

Since Brexit, UK businesses selling to EU consumers are no longer covered by UK VAT. The EU's One Stop Shop (OSS) regime simplifies compliance for distance sellers:

• If your EU B2C sales exceed €10,000/year across all EU countries, you must register for VAT in the EU
• The OSS allows you to register in a single EU country (e.g. Ireland) and file a single return covering all EU sales
• Alternatively, use a fiscal representative or tax agent in the EU

For goods physically sent from a warehouse in the EU to EU customers (e.g. you use Amazon FBA in Germany), you may need to register for VAT in the country where the goods are stored, regardless of the €10,000 threshold.

The US has no federal sales tax, but 45 states have state sales tax, each with different rates, rules, and exemptions. UK businesses selling to US customers online must collect and remit state sales tax if they have economic nexus in a state (generally: >$100,000 in sales or >200 transactions in that state in a year).

Practical approach for UK SMEs:

• If US sales are modest (< $100k total), economic nexus in any individual state is unlikely — review annually
• Once you approach nexus thresholds, use a tax automation service (TaxJar, Avalara) or an accountant with US tax experience
• Shopify, Amazon, and most major platforms have built-in US sales tax calculation and collection features — use them

The UAE introduced 5% VAT in 2018. For UK exporters selling to UAE businesses or consumers:

• B2B imports into UAE: the UAE importer handles import VAT (reverse charge). You do not need to register for UAE VAT for typical B2B export sales.
• B2C direct-to-consumer sales: if you sell direct to UAE consumers and hold stock in the UAE (e.g. via a third-party warehouse), you may need to register for UAE VAT once you exceed AED 375,000/year in taxable supplies. If goods are shipped directly from the UK, import VAT is handled at the border by UAE customs.

The UAE Federal Tax Authority (tax.gov.ae) is the authoritative source for UAE VAT guidance.