Hi
I have just launched my store.
I will be mainly dropshipping products from China and sometimes US and EU countries.
I will be mostly selling to US, UK and Europe.
I am a UAE resident.
Can you please let me know if I need to charge tax and custom fees on my products?
For US, CJ dropshipping told me that the taxes are included.
My item cost usually doesn’t exceed $300, it’s the same for UK and EU as well.
Also, do I need to register any LLC in any of these countries to be able to sell there?
Hi @abdshop ,
if its your startup then
Enable Shopify tax settings for US/UK/EU. because your product are less then $800
Watch your sales volume. If you grow big in the UK/EU, then look into VAT/IOSS registration.
Thanks
Hello @abdshop ,
I hope you are well!
Congratulations for your new store. This is one of the trickiest (and most important) areas for new cross-border ecommerce sellers. Let me break it down by taxes, customs duties, and business registration in the US, UK, and EU for a UAE-based dropshipper:
1. US Customers
Sales Tax:
The US has no VAT, it’s sales tax and only applies if you have nexus (a physical presence, employees, warehouses, or enough sales into a state).
As a UAE resident without a US presence, you generally do not need to collect US sales tax unless you pass certain thresholds in specific states (economic nexus laws, e.g. $100k+ sales or 200+ transactions/year per state).
Shopify won’t require you to register for US sales tax just for selling from abroad.
Import Duties/Customs:
Most shipments under $800 USD (de minimis threshold) enter the US duty-free.
Since your products are <$300, they should clear customs without duty.
“Taxes included” from CJ likely refers to this (they’re shipping DDP — delivered duty paid).
Conclusion: No need to charge tax. Customs usually free under $800. You don’t need a US LLC unless you want one for banking or trust reasons.
2. UK Customers
VAT:
The UK requires overseas sellers to register for UK VAT if you ship directly to consumers and the order value is under £135.
In that case, you (the seller) must collect VAT at checkout and remit it to HMRC.
For orders over £135, import VAT is paid by the customer to customs instead.
Customs Duties:
For goods under £135, usually no duties (only VAT).
For goods above £135, import VAT + duties may apply (paid by customer unless you arrange DDP).
Conclusion: If you expect many UK sales under £135, you may need to register for UK VAT. Otherwise, customer pays VAT/duties on delivery.
3. EU Customers
VAT (IOSS Scheme):
The EU introduced the Import One-Stop Shop (IOSS) for non-EU sellers.
If you register (often via an EU fiscal representative), you collect VAT at checkout for orders under €150 and remit it through IOSS.
If you don’t register, your customers will pay VAT at delivery, which can hurt conversions.
Customs Duties:
Goods under €150: no duties, just VAT.
Above €150: VAT + duties may apply.
Conclusion: For smooth EU selling, most dropshippers use an IOSS intermediary service to handle VAT. If not, your customers pay on delivery.
4. Business / LLC Registration
You do not need to register an LLC in the US, UK, or EU just to sell there.
You can legally sell from the UAE as a sole proprietor or UAE company.
Some sellers form a US LLC for payment gateways, banking, or credibility — but it’s optional.
What matters most is VAT/IOSS registration for UK/EU if you want customers to avoid surprise fees.
Thanks! Got it. I do have the shopify tax settings enabled. Also, can you let me know if it’s the same for Australia, Canada and South Africa as well?
Thanks for such a detailed response.
It’s super helpful.
Also, can you please let me know the same info for Australia, Canada and South Africa?
Also, Saudi Arabia, Qatar and Bahrain
Please check all the mentioned countries details below:
Australia
GST (10%): Required if your annual sales to Australian customers exceed AUD 75,000. If under that, you don’t need to register.
Customs/Duties: Orders under AUD 1,000 → no import duties (but GST may apply). Over AUD 1,000 → duties may apply.
LLC needed? No, you don’t need an Australian company if selling from abroad.
Canada
GST/HST: Required if your sales to Canadian customers exceed CAD 30,000/year. Below that → not mandatory.
Customs/Duties: Buyer usually pays at delivery. Exemptions for low-value imports (usually under CAD 20).
LLC needed? No Canadian company needed.
South Africa
VAT (15%): Typically charged on imports by the customer at delivery. If you’re a foreign seller with no local presence, you usually don’t register.
Customs/Duties: Buyer pays if shipment value > ZAR 500.
LLC needed? Not required.
Saudi Arabia
VAT (15%): Applies to most imports. As a foreign seller with no Saudi presence, you don’t register. Buyer pays VAT on import.
Customs/Duties: Buyer pays upon delivery (unless you use a courier that handles DDP).
LLC needed? Not unless you want a physical business presence there.
Qatar
VAT: Not yet implemented (though planned). Currently, no VAT on imports for consumers.
Customs/Duties: Buyer pays duties at customs depending on product category.
LLC needed? Not required.
Bahrain
VAT (10%): Buyer pays on imports. As a foreign seller, you don’t register unless you have a business presence.
Customs/Duties: Buyer pays at delivery.
LLC needed? Not required.
Also, please like my reply if you find my reply helpful.
Can you provide a link to your store?
Hi @abdshop ,
For Australia, Canada, and South Africa it’s similar , enable Shopify tax settings and it will handle most cases automatically.
Thanks
Manoj
Thanks for your response.
Also, I haven’t made any sale to the UK or EU yet. Do I still need to register for VAT and charge VAT to my customers? Or do I only do it once I pass a certain threshold in sales?
Thanks for your response.
Also, I haven’t made any sale to the UK or EU yet. Do I still need to register for VAT and charge VAT to my customers? Or do I only do it once I pass a certain threshold in sales?
Hi @abdshop ,
No VAT registration is needed before you start selling — only once you have sales and pass the limits.
For theUK: You only need to register if your sales to UK customers go over £85,000/year.
For the EU: You can use the IOSS scheme once you start selling there, but if you haven’t sold yet, you don’t need to register. Each country has its own thresholds, but IOSS makes it simpler once you’re active.
Thanks
Manoj
Congrats on launching your store! Navigating international taxes as a new dropshipper can be really confusing, especially when you’re selling to multiple countries. Here’s what you should know before selling to these countries:
In the UK and EU, smaller orders under around €150 or £135 can skip customs duties but will still need VAT to be collected and sent. If sales go over these limits, you might have to register for VAT in the buyer’s country. Also, keep an eye on the EU’s IOSS (Import One Stop Shop) scheme to handle VAT compliance correctly.
VAT is not applicable in the US. Sales tax is collected by the seller and remitted to the appropriate state or local authority. In the US, products under $800 usually aren’t taxed. CJ Dropshipping may include taxes in their pricing, but that might not cover state-level sales tax due to new tariffs and duties. This is a separate and more complex issue.
Customs duties are usually paid by the customer upon delivery.
If you’re just starting out, I’d suggest skipping the LLC setup for now. It’s not required to sell in places like the US, UK, or EU. Once you grow, consider forming an LLC. It provides personal liability protection and can help build trust with customers.