Multi-Country Tax Compliance for eCommerce: VAT, GST, and Sales Tax with Odoo

Selling internationally creates one of the most complex operational challenges for eCommerce businesses: tax compliance across multiple jurisdictions. Each country has different tax structures, rates, filing requirements, and invoice formats. Getting it wrong leads to fines, penalties, or blocked marketplace accounts.

Odoo's fiscal position system, combined with marketplace integrations, automates most of this complexity.

The Tax Landscape for eCommerce Sellers

United States — Sales Tax

US sales tax is the most complex system globally:

• 46 states have sales tax (Alaska, Delaware, Montana, New Hampshire, Oregon do not)
• Economic nexus — Selling above threshold ($100K or 200 transactions) in a state creates tax obligations
• Marketplace facilitator laws — Amazon, Shopify, eBay, etc. collect and remit tax on behalf of sellers in most states
• Product taxability — Clothing is exempt in some states, taxable in others
• Rate variation — Rates vary by state, county, city, and special district

Odoo handling: Tax rate tables by ZIP code with automatic nexus tracking. Marketplace orders where the platform collects tax are flagged to avoid double-charging.

European Union — VAT

EU VAT for eCommerce sellers:

• OSS (One-Stop-Shop) — Single registration for cross-border B2C sales within the EU
• Standard rates range from 17% (Luxembourg) to 27% (Hungary)
• Reduced rates for specific product categories
• Distance selling thresholds eliminated by OSS (single EUR 10,000 EU-wide threshold)
• Import One-Stop-Shop (IOSS) for goods under EUR 150 shipped from outside the EU

Odoo handling: Fiscal positions per EU country with automatic VAT rate selection based on customer location. OSS reporting generated from sales data.

United Kingdom — VAT

Post-Brexit UK VAT:

• Standard rate: 20%
• Low-value consignment relief eliminated — All goods are subject to VAT
• Marketplace responsibility — Marketplaces collect VAT on goods under GBP 135 from non-UK sellers
• Postponed VAT accounting for imports

India — GST

Indian GST for eCommerce:

• Dual GST structure — CGST + SGST (intra-state) or IGST (inter-state)
• HSN code requirement on all invoices
• E-invoicing mandatory above threshold
• TCS (Tax Collected at Source) — Marketplaces collect 1% TCS on behalf of the government
• GSTR filing — Monthly or quarterly returns

Other Major Jurisdictions

| Country | Tax Type | Rate | Key Requirement | |---|---|---|---| | Canada | GST/HST/PST | 5-15% | Province-specific rates | | Australia | GST | 10% | Low-value goods rule for imports | | Japan | Consumption Tax | 10% | Reduced rate for food (8%) | | Brazil | ICMS/PIS/COFINS | Complex | State-specific, NF-e required | | UAE/KSA | VAT | 5%/15% | E-invoicing compliance |

How Odoo Handles Multi-Country Tax

Fiscal Positions

Odoo's fiscal position system maps tax treatment per customer or order:

• Default fiscal position — Applied to domestic orders
• EU B2C fiscal position — Applies destination country VAT rates
• EU B2B fiscal position — Reverse charge mechanism (0% VAT)
• Export fiscal position — Zero-rated for non-EU customers
• US fiscal position — State-specific sales tax rates

Automatic Tax Selection

When a marketplace order arrives in Odoo:

1. Customer's shipping address determines the country and region
2. Fiscal position rules match the address to the correct tax treatment
3. Tax accounts and rates are applied automatically to the invoice
4. No manual intervention needed for standard scenarios

Tax Reporting

Odoo generates the reports needed for tax filing:

• VAT returns for EU countries (formatted for OSS submission)
• Sales tax summary by state for US filings
• GST reports for Indian compliance (GSTR-1, GSTR-3B)
• Audit trails for all tax calculations

Marketplace Tax Collection

Most major marketplaces now collect taxes on behalf of sellers:

| Marketplace | Collects Tax | Scope | |---|---|---| | Amazon | Yes | Most jurisdictions where it operates | | eBay | Yes | US states, UK, EU, Australia | | Shopify | Optional | Automated or manual per store settings | | Walmart | Yes | US states | | Etsy | Yes | US states, some international |

When the marketplace collects tax, your Odoo integration must track this to avoid double-charging and ensure accurate financial reporting.

Best Practices

1. Register early — Do not wait until you owe back taxes to register in required jurisdictions
2. Automate everything — Manual tax calculation is error-prone and does not scale
3. Review quarterly — Tax rates and rules change. Verify your Odoo fiscal positions quarterly.
4. Keep records — Maintain 7+ years of transaction records for audit defense
5. Work with professionals — Tax law is complex. Use a tax advisor familiar with eCommerce for initial setup.

Next Steps

Tax compliance does not have to be a barrier to international growth. With Odoo's fiscal position system and proper marketplace integration configuration, you can sell globally while staying compliant. Explore our Odoo accounting services or contact us for a tax compliance assessment.