Tax Compliance Is a Cost of Cross-Border Selling
Many TikTok Shop cross-border sellers discover tax compliance only when customs holds a shipment, or when a tax authority sends a notice. By then, the cost of non-compliance includes fines, delayed shipments, and lost customer trust. Tax compliance is not optional—it is a cost of doing business that must be factored into pricing and operations.
The requirements vary by market: the US has state-level sales tax and customs duties, the UK has VAT and customs, Southeast Asian markets have their own import duties and GST. Understanding the tax structure for each market is the first step to avoiding surprises.
Build a Market Tax Profile
For each market you sell to, create a tax profile that includes: import duty rate for your product category, VAT/GST rate, de minimis threshold (the value below which no duty is charged), and tax registration requirements. For example, the US de minimis threshold is $800 for most products, meaning shipments under $800 are duty-free. The UK threshold is £135, under which no customs duty applies but VAT may still be due.
Include these costs in your product pricing. A product that is profitable at $20 may lose money after adding 20% VAT and 5% import duty. Adjust your pricing and creator commissions accordingly.
Market Tax Quick Reference Table
| Market | Import duty (typical) | VAT/GST | De minimis threshold |
|---|---|---|---|
| US | 0-10% | State sales tax 0-10% | $800 |
| UK | 0-12% | 20% VAT | £135 |
| EU | 0-12% | 19-27% VAT | €150 |
| Thailand | 0-30% | 7% VAT | 1,500 THB |
| Indonesia | 0-30% | 11% VAT | $3 |
Questions Sellers Ask
Do I need to register for VAT in each market?
It depends on the volume. Most markets require registration if you exceed a sales threshold. For small volumes, use platforms that collect and remit taxes on your behalf.
How does tax affect creator commissions?
Taxes are calculated on the sale price before commission. Factor this into your margin calculation. A creator commission that looks affordable may become unprofitable after tax costs.
Can Dami help with tax tracking?
Dami tracks orders and commissions per creator. You can export this data for tax reporting. Dami is not a tax advisor—consult a professional for your specific situation.
Conclusion
Tax compliance is a cost that must be factored into every decision. Build a market tax profile, adjust pricing, and seek professional advice for your specific product categories and markets.
