Cross-border tax compliance starts by reconciling what was sold, where the goods were located, who collected tax and what was actually reported. For US and EU expansion, build separate jurisdictional assessments before choosing registrations or relying on a marketplace’s tax settings.
A business can have orderly bank statements and still lack the records needed to explain its tax treatment. A marketplace’s net payout combines sales, taxes, fees and refunds; it should not be treated as a complete sales ledger.
US sales tax: begin with locations and activities
US sales-tax review requires state-specific analysis. California illustrates why inventory and sales volume must be assessed separately: CDTFA guidance discusses physical inventory and a sales-based threshold, rather than a universal exemption for businesses below one national figure. See CDTFA Publication 44 on district taxes. California’s rules should not be copied into a fifty-state assessment.
Prepare sales by destination, warehouse history, marketplace reports and a list of employees or representatives. Ask the adviser to identify which activities and sales count, the relevant periods, any marketplace treatment and the resulting registration or filing obligations. Preserve the reasoning alongside the filing calendar.
EU VAT: separate OSS, IOSS and other obligations
OSS schemes simplify reporting for specified transactions. IOSS covers qualifying distance sales of imported goods in consignments with an intrinsic value not exceeding EUR 150 and excludes excise goods. The correct scheme depends on the supply and the business’s circumstances. Consult the European Commission’s scheme guidance.
Do not assume that joining a scheme resolves every obligation associated with local stock, imports or other supplies. Map each transaction before deciding which return should contain it. The Your Europe OSS overview provides a starting point for that discussion.
Do not confuse the IOSS value limit with duty-free shipping
VAT and customs duty are separate. The Commission’s updated guidance describes a temporary EUR 3 duty for covered low-value distance-sale imports from 1 July 2026, calculated by tariff-classification item rather than simply by parcel or physical quantity. Check the current scope and exceptions before pricing shipments. See the Commission’s low-value import guidance.
Build one reconciliation record per order
| Data group | Suggested fields | Exception to investigate |
|---|---|---|
| Sale | Order ID, seller, destination, currency and gross amount | Order missing from the sales export |
| Tax | Collector, tax amount, treatment and return period | Checkout tax differs from reporting |
| Settlement | Payout ID, fees, refunds and exchange rate | Net cash incorrectly treated as gross sales |
| Fulfilment | Stock location, parcel ID and import reference | Declared transaction does not match the order |
This table is a recommended control design, not a statement that every jurisdiction mandates these exact fields. Adapt it to the records required for the transactions in scope.
Illustrative scenario: tax collected twice
Hypothetical example, not a reported client result. A customer pays VAT at checkout but receives a further import VAT demand when the parcel arrives. Investigate whether the shipment was eligible for the intended treatment and whether correct data reached the declarant. Match the checkout receipt, parcel record and import evidence before deciding how to correct reporting or reimburse the customer.
Changing the website’s wording alone will not repair a data-transmission failure. Give the logistics provider a documented exception process, identify who can correct the record and test the next shipment. Protect tax identifiers when exchanging operational information.
A practical monthly closing workflow
- Freeze the sales export for the period and retain its version.
- Match orders to marketplace tax reports, refunds and settlements.
- Separate inventory transfers from customer sales.
- Record unmatched transactions and investigate their cause.
- Have the responsible adviser confirm adjustments before filing.
- Archive the approved reconciliation and assign unresolved items.
Frequently asked questions
If a marketplace collects tax, can I stop reviewing it?
No single platform report establishes the treatment of all channels and activities. Scope the platform’s role for each transaction and separately review direct sales and stock movements.
Does this checklist cover corporate income tax?
No. Corporate income tax, permanent-establishment questions, transfer pricing and withholding need separate scoping. A sales-tax or VAT review should identify those dependencies without pretending to resolve them.
What is a useful first deliverable?
Request a transaction map, a jurisdictional issue list and a sample reconciliation showing unresolved differences. Those outputs make the next legal and accounting decisions concrete.
Request a financial and tax compliance review
Provide a non-confidential summary of customer markets, sales channels, inventory countries and existing registrations. Jinyuan Law Firm can scope legal due diligence and remediation support alongside appropriately qualified tax professionals in the relevant jurisdictions.
Related reading
- US and EU Cross-Border Compliance: A Due Diligence Roadmap
- US Remote Worker Classification: What to Check Before Hiring
- US and EU Customs Compliance: A Pre-Shipment Checklist
Contact Jinyuan Law Firm to discuss a scoped review. Please use an initial enquiry to describe the issue and relevant locations, without sending identity documents or confidential evidence.
General information only, not legal or tax advice. Applicable rules and conclusions depend on the jurisdiction, current law and specific facts. Source materials checked on 26 September 2026.
