Why VAT Even Matters for Small Restaurant Shops
Here’s the thing: as soon as you start accepting international orders—whether for physical products or digital goods—you’re no longer playing just in your backyard. Different countries have different tax rules, and many of them care deeply about collecting VAT from businesses that sell into their regions.
That vanilla extract sampler you ship to the UK? That’s a taxable transaction under UK VAT law. A downloadable meal plan purchased in Germany? That might trigger a reporting requirement under EU digital tax rules. And the thresholds for needing to register are often low—shockingly low.
If you thought your state’s sales tax system was frustrating, VAT is like that, but with more paperwork and several accents.
Not All Goods Are Treated Equally
Here’s where things get twisty: not all sales are created equal. And no, it’s not just about physical versus digital. Sometimes, it depends on how the customer receives it. Did they download a PDF recipe guide? That’s a digital service. Did you send a box of gluten-free muffins through FedEx? That’s a physical export.
Each of these may be subject to different rules depending on where your customer is located—and how much total revenue you’re generating in that region.
Take the EU’s “One-Stop Shop” (OSS) system, for example. If your total B2C sales into EU countries exceed €10,000 in a year, you’re supposed to register for VAT there—even if your business is based in the U.S. Sound dramatic? It is. And yet many U.S. food businesses selling online don’t even realize they’re over the threshold until they’re already out of compliance.
Thresholds: The Line Between “Just Starting” and “Oops”
Here’s a quick flavor of what thresholds look like globally:
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EU OSS Threshold: €10,000 (across all member states combined)
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UK VAT Registration: Mandatory if sales exceed £85,000 into the UK, but often required at lower levels for non-resident sellers
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Australia & New Zealand: Require VAT registration for digital sales once revenue hits AUD/NZD 75,000
It’s easy to think, “That’s a lot—I’ll never hit those numbers.” But think again. If you’re wholesaling packaged snacks or frozen meals, a few bulk orders can tip you over without warning.
So What Should You Actually Do?
Let’s get out of the weeds for a second. The key to handling international VAT without losing sleep lies in three simple habits:
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Track Sales by Region
Even a simple spreadsheet or a tool like Xero or QuickBooks can help you monitor where your revenue is coming from. Break it down by country. If you see trends building, that’s your early warning system. -
Use the Right Tools
E-commerce platforms like Shopify and WooCommerce often have tax plugins that can auto-calculate VAT or flag cross-border issues. Services like Avalara and TaxJar can also help automate filings—though they’re better suited for businesses with consistent volume. -
Talk to a Tax Pro Before It’s a Problem
It’s tempting to wait until things get complicated. But that’s like waiting to clean the grease trap until the fire alarm goes off. Even a single consultation with a tax advisor familiar with international sales can help you map out where you stand—and what to watch for.
A Story From the Line
Chef Rob from North Carolina started bottling his BBQ sauce and selling online in early 2023. At first, it was mostly local fans ordering. But after getting featured in a food blog overseas, he saw a spike in orders from the Netherlands and Germany. What he didn’t realize was that his total EU sales crossed €10,000 by September—meaning he was supposed to register for VAT and start collecting it from customers.
Instead, he absorbed the cost himself, cutting into his already tight margins. One email from a savvy Dutch customer tipped him off. A few calls with a tax consultant later, Rob registered under the EU OSS system, backdated the filings, and adjusted his pricing slightly to include VAT. Now? He’s not only compliant—he’s confident.
Final Thoughts: Don’t Let VAT Kill Your Buzz
Selling globally shouldn’t feel like walking a tightrope without a net. But you do need to understand the rules before you go too far out. The good news? You don’t have to figure it all out alone.
International VAT considerations for e-commerce might sound intimidating at first—but with the right guidance and a bit of structure, small restaurant owners can serve up their goods around the world without triggering tax drama.
So, go ahead—grow that e-commerce channel. Just make sure your tax recipes are as polished as your menu ones.
