Selling your ebook from your own site puts you in the seller's chair, and the tax question arrives with the first order. Two things decide how much work it turns into: where your readers live, and whether the checkout you use takes the tax liability onto its own books or just calculates a number and leaves the filing to you.
None of what follows is tax advice, and thresholds and rates change. Treat it as the shape of the problem, then check the current position with HMRC or an accountant before you build anything around it.
UK: ebooks are zero-rated, which is not the same as being outside the system
Since 1 May 2020, ebooks have been zero-rated in the UK, matching the treatment of printed books, so a UK reader pays 0% VAT on your ebook. Audiobooks were left at the standard 20% rate, and campaigning by the Publishers Association has not changed that, so if you sell your own narration direct, it is taxed differently from the ebook sitting next to it in your shop.
Zero-rated is a rate rather than an exemption, and that distinction does the work here. Zero-rated sales still count as taxable turnover, so they count towards the £90,000 VAT registration threshold. An author turning over more than that in ebooks has to register even though the VAT collected on those sales is nil.
Below the threshold you can register voluntarily, charge 0% on ebook sales and reclaim the VAT you paid on editing, cover design, advertising and software. Whether that is worth the quarterly returns depends on how much you spend, and it is a good question to put to an accountant with your actual numbers in front of them.
EU: the place of supply is the reader's country, from the first sale
For digital services sold to consumers, VAT is due where the customer is, not where you are. For a seller established outside the EU, including anyone in the UK, there is no threshold on that rule. A single £4.99 ebook downloaded by a reader in Dublin or Dortmund creates a VAT liability in that country.
The mechanism that keeps this manageable is the One Stop Shop. You register in one member state under the non-Union scheme, charge each customer their own country's rate, and file one return covering all of them. Sellers established in the EU get more room: a €10,000 annual threshold on cross-border B2C digital sales, under which you can keep charging your home rate.
Rates are not uniform, because member states were allowed to extend their reduced book rates to e-publications. France applies 5.5% to ebooks and Germany 7%, while some states still run them at the standard rate. You also need evidence of where each customer is, and EU rules expect the underlying records to be kept for ten years.
US: state by state, and your own shop is not a marketplace
There is no federal sales tax, so the question is asked state by state, and roughly half of the states with a sales tax treat downloaded digital goods as taxable. Whether you owe anything depends on nexus, and since the Wayfair decision most states set an economic nexus threshold, commonly $100,000 of sales into that state, sometimes with a transaction count alongside it.
Marketplace facilitator laws are why KDP sales never raise this: Amazon collects and remits as the facilitator. Your own website is not a marketplace, so that cover does not travel with you unless the platform running your checkout has registered as a facilitator itself.
Where the platforms differ
- Payhip acts as your reseller on digital sales to EU and UK customers, so the VAT responsibility for those sales is theirs. It also operates as a marketplace facilitator in the US. For other countries it will collect a rate you set and report it back, but remitting is on you.
- Gumroad takes a similar merchant-of-record position on EU and UK VAT and on US sales tax. The detail has changed more than once, so read its current tax help page rather than a forum post from three years ago.
- Shopify leaves you as the seller of record. It will calculate and collect, and its tax tools flag where you may have crossed a nexus threshold, but registering, filing and paying are yours. The same is true of most self-hosted setups.
How to read that difference
A reseller arrangement turns your sale into a supply to the platform, which is why it removes the registration question rather than just automating it. That is the thing to weigh against the higher percentage such platforms usually take. If you sell mostly into the UK, stay under £90,000 and use a checkout that acts as reseller in the EU, your realistic tax admin is close to nothing. Build the same shop on Shopify and sell steadily into Europe, and you have an OSS registration to sort out from the first order.
Put the tax question into the comparison before you pick a store, not after. If you would rather have the website, mailing list, direct sales and ARC delivery in one place with one monthly fee, the •BulletPoint Publishing Toolchest is built for exactly that, and you can see what it covers before you commit to anything.