Tax charge to buyer upon eBay order (Sales Tax)
For most orders into the US, AU and EU, eBay will do tax collections upon order check out and remit those funds to respective tax offices. Because of this, sellers will not need to do anything as the tax will be automatically calculated based on their tax percentages from the total check out price. You will see the tax amount charged in your order details.
TIP: Each country labels their taxes differently such as IST, VAT, GST and SST. As a cross border seller, you should familiarise yourself with these terms.
If the item sold exceeds a certain price value (as per the country’s requirements), import duty will also be charged once the shipment enters the destination country. Customs officers will contact the buyer to pay this tax before the item is released.
As a seller, you should not need to do anything as it will be the buyer’s responsible to pay the tax once the item arrives in their country. However, it is in your best interest to ensure the shipment is successfully delivered.
Here are a few things you can to to ensure the smoothness of the shipment:
- Make it clear on the item description that the buyer may need to bear any potential tax charges.
- Arrange for duty tax paid. With this method, the item will immediately be cleared upon arrival. This will also shorten the delivery time. You can contact your logistics partner for more information about this arrangement.
Below are the price thresholds (before the item is subject to tax) for the most common countries. It is best if you are up to date on each country’s current regulations and tax rates from their respective websites as this information is subject to change.
US : USD800 and above
AU : AUD1000 and above
UK : GBP135 and above
Example : You sold an item to the US that is shipped from Malaysia costing USD1000. As the item is above the threshold, it will be taxed upon arrival in the US.
Local Government Service Tax
If you are in Malaysia, you are subjected to a government service tax of 6%. This is called service tax for the usage of online services such as eBay. This is calculated as 6% from the total fees paid to eBay. Check with your local law for this more on this fee.