Global Tax Comparison for eCommerce Businesses (2025 Update)

The explosion of eCommerce has created new challenges and opportunities for businesses selling across borders. Entrepreneurs must navigate a patchwork of tax rules – consumption taxes, income taxes, digital levies and customs duties – that differ widely by country and region. This 2025 update surveys key tax regimes worldwide, focusing on the major taxes affecting eCommerce (VAT/GST, sales tax, corporate income tax, digital service taxes, and import duties). It highlights recent changes and trends, compares rates and rules across regions (North America, Europe, Asia-Pacific, Latin America, Middle East & Africa), and offers practical tips for staying compliant.

Key Tax Categories for eCommerce

Consumption Taxes (VAT/GST/Sales Tax). Most countries levy a value-added or goods-and-services tax on consumer purchases. In Europe, Asia and many other regions this is called VAT or GST (often around 5–25%). For example, China’s standard VAT rates are 13%, 9% and 6%. In contrast, the United States has no national VAT, relying on state sales taxes instead. After the 2018 Wayfair ruling, almost every U.S. state now forces remote sellers to collect sales tax once they hit an economic nexus (commonly $100k or 200 transactions). Canada has a federal GST of 5% and provincial sales taxes (PST/HST) ranging ~5–15%. In eCommerce, these taxes apply to online sales to consumers, and many countries have imposed them on foreign sellers of digital goods and services as well.
Corporate Income Tax (CIT). Profits earned by companies are taxed at different rates around the world. The U.S. federal rate is 21% (roughly 25% when U.S. state taxes are added), while major economies like the UK have rates near 25%. China’s standard CIT is 25%, Mexico’s is 30%, and in many Latin American and African countries it’s often above 25%. These rates tend to rise in high-income countries and fall in small or resource-based economies. Recent trends include the OECD’s global minimum tax (15% Pillar Two) being adopted in many jurisdictions (e.g. the UK now imposes a 15% top-up tax on large multinationals).
Digital Services Taxes (DST) and Tech Levies. Many governments have introduced special taxes on revenues from digital services (streaming, advertising, etc.) to capture income that traditional tax rules miss. For instance, France has a 3% DST on certain digital revenues, Poland 1.5%, Italy 3%, and the UK 2%. India had a 2% “equalization levy” on online ads (recently repealed in 2024), and several Middle Eastern and Latin American countries have similar levies. These are generally capped (often 3-7%) and target large foreign tech companies. Entrepreneurs selling digital products or advertising services internationally should check for such levies on their revenues.
Import/Export Duties. Physical goods shipped across borders may incur customs duties and import taxes. These depend on the product’s tariff classification and country of origin. For eCommerce sellers, key issues are de minimis thresholds and simplified regimes. For example, before 2022 the U.S. let any parcel under $800 enter duty-free, but that exemption is being phased out in favor of taxing all imports. The EU removed its €22 VAT exemption on imports (July 2021), so essentially all goods into the EU pay VAT (below €150 shipments can use the Import One-Stop-Shop (IOSS) scheme). China, Australia and others have similar low-value VAT rules. Export duties are generally low for consumer goods, but tariffs (like U.S.-China or Mexico-China tariffs) can apply to some products. E-commerce firms often face import taxes but rarely export duties.

Global Tax

North America

United States: There is no federal sales tax or VAT; instead, 45 of 50 states (plus many cities/counties) impose sales tax. Since South Dakota v. Wayfair (2018), nearly all states have “economic nexus” laws. Common thresholds are $100,000 in annual sales or 200 transactions; however, some states set higher bars (e.g. California $500k, Alabama $250k). Below threshold, out-of-state sellers need not collect tax, but above it they must register. Many states also require out-of-state marketplaces (Amazon, Etsy) to collect and remit tax on behalf of sellers. State tax rates vary (~5–10%). Foreign sellers (say, selling into the U.S.) need to monitor each state’s rules. Corporate tax is 21% federally (around 25% combined with states). The U.S. has no national VAT, and de minimis thresholds (the old $800 rule) are being eliminated – as of 2025, even very small imports can incur duties and taxes.
Canada: Canada levies a federal GST of 5%. Most provinces have their own PST (e.g. British Columbia 7%, Manitoba 7%, Saskatchewan 6%, Quebec 9.975%) or a combined HST (Harmonized Sales Tax) at 13–15% in Atlantic provinces and Ontario. Foreign sellers of digital or physical goods to Canadians must register for GST/HST if sales exceed CAD 30,000 in a 12-month period. Once registered, they collect tax on each sale and remit it. In July 2025, new rules require online marketplaces earning over CAD 30k to register and collect GST/HST on sales by third-party sellers, similar to U.S. marketplace facilitator laws. Corporate tax in Canada is 15% federally plus provincial (total ~26%), but e-retailers will mostly confront GST/HST and PST obligations.
Mexico: Mexico’s national VAT rate is 16% on most sales, with a 0% rate on many basics and exports. Mexican sales tax applies to goods and digital services. As of January 2025, Mexico specifically requires foreign e-commerce platforms (Amazon, SHEIN, Temu, etc.) to charge its 16% VAT on sales to Mexican consumers; noncompliance can even lead to internet access being blocked. Mexico imposes import tariffs on consumer goods – in 2024 it introduced a 35% tariff on many foreign textiles, and in 2025 it raised taxes on low-value imports to over 17–19% depending on origin. Mexico’s federal corporate tax is 30%. For e-merchants, key points are collecting 16% VAT on Mexican sales (often via local platform responsibility), and understanding new high import duties on cheap shipments.

Europe

European Union (EU): The EU has a harmonized VAT system, with standard rates in each country (17–27%) and lower rates for some goods. Since July 2021 the EU overhauled e-commerce VAT: distance selling thresholds were abolished and replaced by a single EU-wide threshold of €10,000. That means any EU-based seller exceeding €10k in cross-border sales must charge VAT of the customer’s country (via one VAT registration under the OSS – One-Stop-Shop). Moreover, the old import VAT exemption (€22) was removed – all imports into the EU are now subject to VAT. However, goods ≤€150 can use the new Import OSS (IOSS) scheme: foreign sellers or marketplaces can collect EU VAT at checkout via IOSS, simplifying compliance. E-merchants should use OSS/IOSS registrations to file one VAT return for all EU sales.

EU nations also differ in corporate tax (from 12.5% in Ireland to ~30% in others) and non-VAT taxes, but consumption tax dominates cross-border issues. There is no EU-wide Digital Services Tax – the EU postponed its levy. Instead, several member states enacted local DSTs (e.g. France 3%, Poland 1.5%). The EU itself is implementing the “VAT in the Digital Age” reforms (ViDA) through 2030: for example, mandatory e-invoicing for cross-border B2B by 2030, expanded reporting requirements, and extended OSS rules.
United Kingdom: Post-Brexit, the UK has its own VAT and e-commerce rules. Standard VAT is 20%, with a 0% rate on exports. Since Jan 2021 the UK ended the £135 VAT exemption for imports: now all goods are taxed at the point of sale by foreign sellers (via a VAT notice scheme) or collected at import. Online marketplaces must charge UK VAT on sales made through them. The main corporate tax rate is 25% for large companies (19% for small profits). The UK introduced a 2% Digital Sales Tax on specified platform revenues in 2020. For compliance, international sellers should use the UK’s non-resident VAT registration or rely on marketplace collection.
Other Europe: Major economies like Germany (VAT 19%, CIT ~30%) and France (VAT 20%, CIT ~25-30%) have high tax levels for consumers and corporations. The EU requires online marketplaces to act as “deemed suppliers” for VAT if they facilitate cross-border sales. Under this rule, the marketplace (e.g. Amazon EU) is responsible for charging VAT on EU sales made through its platform, relieving smaller sellers of direct VAT registration in each country. Similar marketplace laws now exist in many regions. Overall, EU countries are high-tax: their VAT/GST rates (often 20%) are generally higher than the global average, and compliance systems (OSS, e-invoicing) are complex but offer unified reporting.

Asia-Pacific

China: China has a multi-rate VAT/GST system (standard rates 13%, 9%, 6%). It taxes both goods and services, with many exemptions. For eCommerce, China allows cross-border B2C goods (via approved platforms) to pay 0% VAT if each order is <¥7,000 and annual sales <¥20,000; otherwise, regular VAT applies. Imported consumer goods may incur import VAT and customs duties based on classification. China’s corporate tax is 25% (with incentives like 15% for “high-tech” firms). In practice, a foreign online seller to China typically deals with VAT on digital services (if no permanent presence) and must navigate customs clearance for physical goods.
Japan: Japan levies a national consumption tax (VAT) of 10% on most sales (with an 8% rate on most food and newspapers). Overseas online sellers to Japanese consumers must register and collect this tax once sales exceed a modest threshold. Japan’s corporate tax rate is about 30% (national + local combined). No specific DST exists, but digital services sold in Japan are subject to consumption tax. The relatively stable tax regime means Japanese e-retailers mainly need to focus on invoicing and proper invoicing to collect the 10% tax.
India: India’s GST has multiple slabs (0%, 5%, 12%, 18%, 28%). Most consumer goods and services face 18%. Foreign e-tailers selling digital services or goods to Indian consumers must register for GST if annual sales exceed INR 20 lakhs (~$25k). Additionally, India had a 2% “equalization levy” on online advertising (repealed in 2024) and a 6% levy on e-commerce supply (on marketplace facilitators, dropped by April 2025). The headline corporate tax is 25-30%. Compliance in India can be complex due to multiple tax rates and frequent rule changes, so many foreign sellers use local e-commerce platforms or trusted tax advisors.
ASEAN & Oceania: Many Asia-Pacific countries have VAT/GST. For example, Singapore has an 8% GST (raising to 9% in 2025). Australia has a 10% GST on all sales including low-value imports (since 2018, e.g. <AU$1000 goods are taxed) and a 30% CIT. New Zealand: GST 15%. South Korea: VAT 10%. Indonesia: VAT 11%. Malaysia: reintroduced 6% SST (sales tax) since 2020, no GST. Thailand: VAT 7%. Hong Kong: no VAT/GST at all (a tax-friendly feature). The corporate tax in Singapore is 17%, in Hong Kong 16.5%. Singapore and Hong Kong are notable e-commerce hubs with low or zero consumption tax, though they still enforce GST on imported digital services to consumers (Singapore requires foreign digital suppliers to collect 9% GST since 2020).

Across APAC, a key trend is taxing digital cross-border sales. Many countries (Japan, Korea, Malaysia, Vietnam, etc.) now require foreign sellers of digital products or services to register for GST/VAT. There is growing use of registration thresholds and simplified schemes, but enforcement is patchy. Entrepreneurs should monitor each market’s digital tax rules.

Latin America

Brazil: Brazil has no federal VAT but a complex set of state ICMS and federal IPI taxes. For practical purposes, consumer-level eCommerce in Brazil usually incurs state VAT (~18% on goods) plus a federal tax on industrial products (IPI) and municipal service tax (ISS) on services. In 2020 Brazil created a Simplified Tax System for e-commerce (SIMPLES) for small sellers, and in 2024 it enacted a federal Sped E-Commerce regime requiring international platforms (Amazon, etc.) to collect a 12% tax on imports of small goods. Corporate tax in Brazil is high (34% combined). In sum, selling into Brazil involves managing multiple indirect taxes and often using local compliance solutions.
Mexico: (Covered under North America above – 16% VAT and recent 2025 changes.)
Other LatAm: VAT is common (Argentina 21%, Chile 19%, Peru 18%, Colombia 19%). Many Latin countries have high top corporate rates (Argentina ~25-35%). Cross-border eCommerce rules are evolving: for example, several countries in South America now require foreign digital sellers to collect VAT (similar to EU). Trade blocs like MERCOSUR are discussing e-commerce tax harmonization, but currently each country acts on its own. Entrepreneurs often need local tax advice. Generally, Latin America is a moderately high-tax region with relatively high VAT and corporate taxes, though some countries allow special tax regimes for foreign businesses.

Middle East & Africa

Gulf States: Several Gulf Cooperation Council (GCC) countries have introduced VAT recently. UAE and Saudi Arabia have VAT (5% in UAE, 15% in KSA). Bahrain plans 10% VAT (deferred several times, now expected). Qatar introduced 5% VAT on Jan 2024. Kuwait is still planning VAT. Notably, many Gulf countries have 0% personal and corporate taxes (or only on oil companies). For eCommerce, this means sales within GCC states incur a uniform VAT, but exporters in the region often pay no corporate income tax (e.g. Saudi has 20% CIT on foreign companies, UAE has 0%).
Israel: Israel has a 17% VAT and a 23% corporate tax. It collects VAT on digital services to Israelis (foreign platforms must register and remit VAT). No specific DST beyond VAT.
Other Middle East: Countries like Turkey have VAT (18%) and CIT ~25%. Egypt has VAT 14%, South Africa 15%. Many North African countries (Morocco 20%, Tunisia 19%) and sub-Saharan (Nigeria VAT 7.5%, Ghana VAT 12.5%) have similar systems. Some African governments are piloting digital taxes, but enforcement is uneven. Kenya: DST 1.5% on digital services (applied through resident suppliers).
Africa: South Africa’s VAT is 15% on goods and services. Foreign digital suppliers to South Africa must register and charge VAT. Corporate tax is 28%. Other African nations vary widely; for instance, Rwanda has VAT 18%, Nigeria 7.5%. Many rely on informal retail sectors, so eCommerce taxation is still developing.

Key Differences and Trends

Taxes vary by region. Europe and Latin America generally have higher consumption taxes (often 20+%) and corporate taxes (~25-35%), whereas Middle East hubs have low or no income tax and lower VAT (5-15%). North America’s US stands out with state sales taxes instead of VAT, while Canada has moderate GST. Asia-Pacific is mixed: China has ~13% VAT, Japan 10%, India 18%, but Hong Kong 0%.
Rise of digital taxation. Almost all jurisdictions are updating laws to tax e-commerce. The EU’s 2021 VAT e-commerce package removed low-value exemptions, imposed VAT on all imports and mandated OSS/IOSS collection. India, Australia, Japan and others now tax foreign digital sales by requiring registration. Many countries are rolling out similar rules for marketplaces.
Global minimum tax. Large international sellers (>$750M) must now contend with the OECD’s 15% global minimum tax (Pillar Two), which many countries (UK, EU members, Japan, etc.) have implemented for 2024 onward. This affects corporate structuring for large eCommerce firms.
Compliance complexity. Even as tax rates converge, compliance is complex. States, provinces, or countries have different filing rules, thresholds, and definitions. For example, Amazon sellers in Europe may need to file VAT returns in several countries if not using OSS. In the U.S., remote sellers face 45+ jurisdictions with varying thresholds. Staying up-to-date with changing rules (like Mexico’s new import tariffs or EU ViDA reforms) is critical.

Practical Compliance Strategies

Register early in target markets. Identify countries where you exceed registration thresholds (e.g. $100k sales in EU country, CAD 30k in Canada, etc.) and register for VAT/GST or sales tax. Use unified schemes where possible (EU OSS for EU-wide VAT, IOSS for imports into EU, GST/HST registries in Canada, and similar platforms in Australia/New Zealand).
Use marketplace facilitator rules. Many platforms (Amazon, eBay, Shopify) now collect and remit VAT/sales tax on behalf of sellers in certain jurisdictions. If selling through marketplaces, verify whether they handle your tax obligations. Even so, keep records and ensure the proper taxes are indeed paid. For direct sales, be prepared to register separately.
Classify products and keep documentation. Use correct HS codes for imports to apply the right duty rates. Maintain records of sales by country, invoices, and tax payments. This is crucial for audits and to avoid penalties.
Automate tax calculation. Leverage tax software or services (Avalara, TaxJar, etc.) that automatically calculate the correct VAT/sales tax based on buyer location. This reduces errors and eases filing.
Plan logistics and pricing. Consider warehousing goods in tax-friendly jurisdictions or free-trade zones to reduce duties. Decide whether to quote prices “tax included” (end-customer price) or add tax at checkout. Understand Incoterms – who bears import duties (DAP vs. DDP shipping terms).
Seek professional advice. Given the complexity, consult tax advisors, especially for countries with rapidly changing rules (e.g. Mexico’s 2025 reforms, ongoing OECD updates, etc.).

Tax-Friendly vs High-Tax Jurisdictions

Tax-friendly spots: Countries with low/zero consumption or corporate taxes can benefit e-merchants in some respects. For example, Hong Kong (no VAT/GST, 16.5% CIT) and Singapore (9% GST, 17% CIT) have straightforward regimes and sound logistics. UAE offers 5% VAT and 0% personal/corporate taxes (for most businesses). Some smaller economies (Ireland’s 12.5% CIT, Estonia with 20% CIT on distributed profits, etc.) are also attractive for holding companies. However, these jurisdictions still collect VAT/GST on local sales, and profits may be taxed at home via transfer pricing rules.
High or complex-tax regimes: The EU (especially countries like Hungary, Denmark, Sweden) has some of the highest VAT rates (up to 27%). Latin America (Brazil, Argentina) often has very complex multi-layer taxes and high tariffs on imports. Even the U.S. can be complex due to 50 tax jurisdictions and now the removal of de minimis exemptions. India and Vietnam have multiple GST slabs making pricing intricate. As a rule, emerging markets are intensifying eCommerce tax enforcement, while some older trade-economies rely on huge legal frameworks.

Region	Country	VAT/GST/Sales Tax	Corporate Income Tax	DST	Import Duties	Foreign Seller Registration
North America	United States	None (avg state ~6–8%)	21% (federal)	None	0% ≤ $800 (abolished Aug 2025); taxed thereafter	Yes – state-by-state nexus thresholds apply
North America	Canada	5% GST + HST (up to 15%)	~26.5% total	3% Equalization levy	Exempt ≤ CA$20; 5–20% above	Yes – register if sales > CA$30k/year
North America	Mexico	16%	30%	None	33.5% on <US$2,500 imports (non-FTA); ≤$50 exempt (USMCA)	Yes – register for VAT regardless of volume
Europe	United Kingdom	20%	25%	2%	≤£135: duty-free; VAT at sale	Yes – register; VAT at sale for ≤£135
Europe	Germany	19%	~30%	None	≤€150: exempt (IOSS); normal duties above	Yes – OSS/IOSS registration required
Europe	France	20%	25%	3%	≤€150: exempt (IOSS)	Yes – OSS/IOSS for VAT collection
Europe	Netherlands	21%	25.8%	None	≤€150: exempt (IOSS)	Yes – use OSS/IOSS
Asia-Pacific	China	13%	25%	None	Personal CBEC imports ≤¥5,000 duty-free	Yes – via CBEC platforms/registration
Asia-Pacific	Japan	10%	~30%	None	≤¥10,000: exempt	Yes – register if turnover >¥10m
Asia-Pacific	India	18%	25% + 4% cess	2% Equalization Levy	No de minimis; duties often ~35%	Yes – register if turnover > ₹20m
Asia-Pacific	Australia	10%	30% (25% small firms)	None	≤A$1,000: 10% GST; above: GST + duties	Yes – register if turnover > A$75k/year

In summary, eCommerce sellers face a patchwork of taxes worldwide. Key differences include whether a country has VAT (and at what rate), the presence of marketplace tax laws, corporate tax levels, and duties on imports. The general trends (higher digital tax enforcement, unified reporting schemes) suggest cross-border selling will require increasing sophistication. Smart sellers will plan for taxes from the start: registering where needed, leveraging simplified schemes (like IOSS/OSS), and staying current on local rules. By doing so, they can expand globally while minimizing surprises and penalties.