TAX · INTERNATIONAL · OPERATIONS · 9 APRIL 2026 · 8 MIN READ
Tax registration thresholds, and when selling abroad gets complicated
A threshold is a date in your future, not a permission slip. The question is which of your markets has one you are about to cross, and which never had one at all.
You register for tax in another country when you cross that country’s threshold — and every country sets its own, measured over its own window, counting its own definition of sales. The UK registers a business when taxable turnover passes £90,000 in a rolling twelve months. EU cross-border selling has one combined threshold of €10,000 across all other member states, above which you charge the destination rate. US states set theirs individually: Arizona’s is $100,000 in sales, California’s is $500,000. The dangerous cases are the markets with no threshold at all — a business with no establishment in the UK has to register from the first sale, and holding stock in a country usually registers you on the day the stock lands, whatever you have sold.
IN SHORT
- Every country sets its own registration threshold, its own measurement window and its own definition of which sales count, so there is no single number to watch.
- The UK VAT registration threshold is £90,000 of taxable turnover over the last 12 months, per gov.uk.
- EU cross-border distance selling has one combined €10,000 threshold across all other member states; above it you charge the destination country’s rate and can file through OSS instead of registering in each country.
- US economic nexus is set per state — Shopify’s own US tax reference lists Arizona at $100,000 in sales and California at $500,000, on different measurement periods.
- Canada’s GST/HST small supplier threshold is $30,000 over four consecutive calendar quarters, per the CRA.
- Some obligations have no threshold: gov.uk states that a business based outside the UK with operations outside the UK must register if it supplies any goods or services to the UK, regardless of turnover.
- Holding stock in a country — including at a 3PL — generally creates an obligation immediately, which is why a fulfilment decision is also a tax decision.
- This is not tax advice. Thresholds move, and the cost of reading one wrong is paid in penalties, not in developer hours.
A threshold is a date, not a decision
The question in the title is usually asked as though registration were optional above a line and forbidden below it. It is neither. A threshold is the point at which registration stops being your choice — and for most growing stores, crossing it is a matter of *when*, not *if*. The useful work is not deciding whether to register. It is knowing, for each market you sell into, roughly how many months away your threshold is.
That reframing matters because registration takes time. Applying, waiting for a number, configuring it in Shopify, changing your invoices and getting your accountant a filing process is weeks of work in the good case. If you discover you crossed a threshold in February when you reconcile in June, you owe tax on every sale since February, and you collected none of it. The money comes out of your margin rather than the customer’s card.
So the discipline is unglamorous: a spreadsheet, one row per market, with the threshold, the window it is measured over, and where you currently are against it. Shopify’s analytics can give you sales by country; nothing in the platform will tell you what that means legally.
The four regimes a UK or EU store meets first
Four sets of rules cover most of the first few years of selling abroad. Each is a different shape, and confusing the shapes is where the errors live.
The UK. gov.uk gives one figure: registration is required when total taxable turnover for the last 12 months goes over £90,000. Note “last 12 months” — it is a rolling window, not a financial year, so the check is continuous rather than annual.
The EU. Since July 2021 the per-country distance selling thresholds are gone. Shopify’s EU tax reference states that a single threshold now applies across the union: €10,000 in combined sales to other EU member countries. Below it you may charge your home rate; above it you charge the customer’s country rate. The One-Stop Shop exists so that this does not mean 26 registrations — the European Commission’s OSS guidance describes the Union scheme as covering intra-Community distance sales through one return, filed by the end of the month following each quarter.
The United States. There is no federal threshold, because there is no federal sales tax. Each state sets its own economic nexus rule, and Shopify’s US tax reference lists them one by one — Arizona at $100,000 in sales, California at $500,000, with some states measuring over a calendar year and others over a rolling twelve months. It also notes that most states exclude marketplace sales from the calculation while a long list of them include those sales, which is the kind of detail that makes a “are we close?” answer wrong by a wide margin.
Canada. The CRA sets the small supplier threshold at $30,000 over four consecutive calendar quarters, with 29 days to register after exceeding it. Non-residents without a permanent establishment may also be asked for security against estimated net tax.
- Rolling windows (UK, several US states) need a continuous check; annual windows need a check you can forget for eleven months.
- The EU’s €10,000 is *combined* across all other member states, so four small markets can cross it while none of them looks significant alone.
- US thresholds sometimes carry a transaction count as well as a value, which catches low-price, high-volume catalogues first.
- Marketplace sales may or may not count towards a US state’s threshold depending on the state — check per state, not per country.
The obligations with no threshold at all
Thresholds are the comfortable part. The expensive surprises come from rules where the trigger is not a number.
No establishment, no threshold. gov.uk is explicit that a business based outside the UK, with operations outside the UK, must register if it supplies any goods or services to the UK — or expects to within the next 30 days. There is no £90,000 grace period for a non-established business. A US brand shipping its first order to a British customer is, on the face of that rule, already in scope. Several countries take a similar line with non-resident sellers.
Stock creates presence. Moving inventory into a country to shorten delivery times generally creates an obligation there from the moment it arrives, independent of sales. That makes “let’s put pallets in a Dutch 3PL for faster EU delivery” a tax decision wearing a logistics costume. It is still often the right call — but it belongs in the same conversation as the registration it triggers, not in a separate one six months later.
Import schemes have their own limits. The European Commission’s OSS guidance sets the Import scheme at consignments of €150 or less, excluding excise goods, with monthly returns. Shopify describes IOSS the same way: collect VAT at checkout on orders at or below €150 so the customer is not charged on delivery. Above that limit you are into ordinary import VAT and customs, and the customer meets a bill at the door unless you have arranged otherwise.
We have written separately about [what that door-step bill does to repeat purchase rates](/blog/duties-at-checkout-the-post-purchase-surprise-that-kills-repeat-orders). It is the single clearest example of a tax decision showing up as a retention number.
What actually gets complicated — and it is not the calculation
Every tax engine on the market calculates correctly. Shopify calculates correctly. The complexity is downstream of the number.
Prices displayed. Tax-inclusive display is expected in the UK and EU and unusual in the US. Once you cross into a market with the other convention, either your prices move when a visitor’s country changes or your margin does. Shopify Markets can handle this; somebody still has to decide which of the two gives, and merchandising should make that call before finance discovers it.
The record, not the return. For each order you need to be able to say later which registration the tax was collected under. That is easy while there is one. At four registrations across two regimes, with a marketplace collecting on your behalf in some states and not others, the reconciliation is only as good as the data you kept at the time. Retrofitting it is the worst month of somebody’s year.
Returns and credit notes. A refund has to reverse the tax under the same registration and, often, at the same rate that applied on the original order — not today’s rate in today’s regime. Stores that changed tax setup mid-year and then refunded an old order are where this surfaces.
Systems disagreeing. Shopify, the ERP and the accounting package each have their own view of an order’s tax. When they disagree, the return is filed from one of them and defended with another. Deciding which system is authoritative is a one-hour decision that saves a quarter.
The advice we usually give, which is to slow down
Most stores open more markets than they can administer, because opening one in Shopify takes an afternoon and the consequences arrive on a lag. A market is not live when the currency switches; it is live when someone can file for it.
So the honest sequence is: sell into a country from your existing setup, watch it against the threshold, and register when the numbers say you must or when the market is worth the overhead. Registering pre-emptively in six countries because it feels tidy buys you six filing obligations with nothing behind them, and returns still have to be filed when they are nil.
The exception is anywhere with no threshold, or anywhere you intend to hold stock. Those you handle before the first order, not after the hundredth.
And when a market does earn a registration, that is the moment to fix the plumbing — pricing convention, the audit trail, the refund path — while there is one market’s worth of history to correct rather than four. Our [international rollout work](/services/markets) is mostly this: getting the operational half right at the point where it is still cheap.
Everything above is a developer’s reading of published guidance, and a developer’s reading is not a filing position. Thresholds change, reliefs have conditions we have not listed, and your accountant is the person who signs. Use this to know which questions to take to them, and when.
Questions this raises
Do I need to register for VAT in every EU country I sell to?
No. Since July 2021 a single €10,000 threshold applies across combined sales to other EU member states. Above it you charge the customer’s country rate, but the One-Stop Shop lets you declare and pay through one registration and one quarterly return instead of registering in each country individually.
What is the UK VAT registration threshold?
gov.uk gives £90,000 of total taxable turnover over the last 12 months. It is a rolling window, so the test applies continuously rather than at year end. A business based outside the UK with operations outside the UK does not get that allowance at all — gov.uk says it must register if it supplies any goods or services to the UK.
Is there one threshold for selling into the United States?
No. Each state sets its own economic nexus rule after the Wayfair decision. Shopify’s US tax reference lists them per state — Arizona at $100,000 in sales, California at $500,000 — with different measurement periods, sometimes a transaction count as well as a value, and different treatment of marketplace sales.
Does storing inventory in another country create a tax obligation?
Usually yes, and usually immediately, independent of how much you have sold there. That makes a 3PL or fulfilment centre decision a tax decision too. Confirm the position for the specific country with an adviser before the stock ships, not after.
Does Shopify file my returns for me?
Shopify calculates tax and, in the US, tracks your sales against state thresholds. Calculation is not filing. Unless you are using a Shopify Tax plan with automated filing available in your region, the return is still yours — or your accountant’s — to prepare and submit.
Should I register before I cross a threshold?
Rarely, unless the market has no threshold, you plan to hold stock there, or you need to reclaim input tax. Early registration is a real obligation with real deadlines, and a nil return is still a return somebody has to file. Register when the market has earned the overhead.
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