Dropshipping is legal in the US and the EU, and the regulations that apply are the ones any online retailer follows. As the seller, you’re responsible for sales tax or VAT, import costs, product safety, honest advertising, consumer rights, privacy and intellectual property, even though a supplier ships the order. Check each product and destination against those areas before listing, and recheck when anything changes.
Rules change and depend on your situation, so treat this as a general overview as of October 2026, not legal or tax advice, and confirm details with an accountant or lawyer.
Dropshipping Regulations at a Glance
Dropshipping regulations cover eight areas, and your supplier’s location doesn’t change who’s responsible: if your store sells to the customer, your business is the seller. For the short answer on whether the model itself is allowed, see our guide to whether dropshipping is legal.
| Area | United States | European Union |
|---|---|---|
| Business setup | State and local permits; EIN where required | National registration; VAT ID where required |
| Sales tax or VAT | State sales tax once you have nexus | Import VAT on commercial imports |
| Import costs | Low-value parcels no longer enter duty-free | €3 duty per declaration line since July 2026 |
| Product safety | CPSC rules and certificate eFiling | GPSR; CE marking where required |
| Consumer rights | FTC Mail Order Rule | 14-day withdrawal; 2-year guarantee |
| Advertising | FTC truth-in-advertising rules | Unfair commercial practices rules |
| Privacy | CalOPPA and state privacy laws | GDPR |
| Intellectual property | Federal trademark and copyright law | EU and national IP law |
Sales Tax and VAT Rules for Dropshippers
US sales tax
States can require you to collect sales tax once you have nexus there. Economic nexus thresholds vary by state: many use $100,000 in annual sales into the state, some also count transactions (often 200), and the measurement period differs, so check each state you ship to. Physical nexus, such as inventory you own in a fulfillment warehouse in that state, can create obligations below them, and product taxability varies by state. Marketplaces such as Amazon, Etsy and TikTok Shop generally collect tax on their sales, though that doesn’t always end your own registration or reporting duties, and those sales can count toward nexus. A resale certificate can stop a US supplier charging you sales tax, but only if it’s valid and accepted under the rules of the state the goods ship to.
EU and UK VAT
Commercial goods imported into the EU are subject to import VAT whatever their value. For consignments worth up to €150, excluding goods subject to excise duties, the Import One-Stop Shop (IOSS) lets you charge VAT at checkout and report it monthly; when your valid IOSS number reaches the customs declaration, the parcel isn’t charged import VAT again. IOSS covers VAT only, not duties or handling fees, and most non-EU sellers need an EU intermediary; the European Commission’s low-value consignment guidance explains the scheme. The optional Union One-Stop Shop (OSS) covers eligible cross-border sales to consumers within the EU, while domestic sales or stock held in an EU warehouse can require local VAT registration.
Our explainer on France dropshipping VAT rules shows what selling without IOSS involves. In the UK, for direct sales to consumers where the whole consignment is worth £135 or less, the seller charges UK VAT at the point of sale, for imported goods that aren’t subject to excise duty, so an overseas seller making these sales generally has to register with HMRC (sellers of only zero-rated goods can apply for an exemption); marketplace sales, sales to VAT-registered businesses and Northern Ireland work differently.
Import Duties and Customs Rules
Since August 29, 2025, commercial shipments to the US no longer qualify for duty-free de minimis entry under $800, whatever country they ship from, so individual dropshipped parcels are now subject to applicable duties, tariffs and customs entry requirements. Since July 1, 2026, the EU charges a temporary €3 customs duty per customs declaration line, regardless of how many units the line covers, on distance-sale consignments with an intrinsic value up to €150, which used to enter duty-free; some goods claiming preferential treatment are handled differently. A separate €2 handling fee per declaration line is scheduled from November 1, 2026 for distance-sale imports, including those above €150. Check current charges before pricing, and in any market:
- Declare the real transaction value. Undervaluing parcels to avoid duty is customs fraud.
- Use the correct tariff classification (HS code) and country of origin.
- Agree who pays: under DDP terms you handle clearance and duties; under DAP the customer takes on clearance and import charges by contract, although for IOSS imports the IOSS holder or its representative still has to act as declarant.
- Get a written quote listing duties, tariffs, clearance and handling fees, and show at checkout whether they’re included.
- For EU parcels up to €150, agree with your supplier and customs declarant how the merchant’s and the manufacturer’s product identifiers will be reported once that becomes mandatory in November 2026.
Product Safety and Labeling Rules
In the US, safety rules follow the product category:
- Products subject to CPSC certification requirements need a General Certificate of Conformity or, for children’s products, a Children’s Product Certificate; the importer issues it for products made abroad, and for US-made goods the manufacturer or private labeler does, and since July 8, 2026 most regulated imports must have that certificate data eFiled with customs at entry.
- Children’s products covered by a children’s safety rule need third-party testing at a CPSC-accepted lab, a Children’s Product Certificate and, where practicable, tracking labels.
- Radio and wireless electronics need FCC authorization, and private-label cosmetics can make you the responsible person under FDA rules.
Start with the CPSC’s online seller guide for US consumer products. In the EU, the General Product Safety Regulation (GPSR) has applied since December 13, 2024 to the consumer products it covers; food, including food supplements, and medicines follow separate rules. Listings must show the manufacturer’s name and postal and electronic address, an EU responsible person’s details when the manufacturer is outside the EU, a product picture, the product type and identifiers, and any warnings in the local language. Toys and the electrical, electronic and radio products covered by EU product laws also need CE marking after the conformity assessment those laws require, and countries such as Germany require packaging registration before you sell.
Consumer Rights and Advertising Rules
Under the FTC’s Mail, Internet, or Telephone Order Merchandise Rule you need a reasonable basis for the shipping time you state, or 30 days if you state none, and if you can’t meet it you must get the customer’s consent to the delay or promptly refund unshipped orders in full. When we fulfill an order at USAdrop, processing takes 1–3 business days and China-to-US delivery 6–13 days, so your shipping page should cover both.
In the EU:
- Online buyers can usually withdraw within 14 days of receiving the goods without giving a reason, with exceptions such as personalized products.
- You can pass change-of-mind return costs to the customer if you said so before purchase.
- Defective goods fall under the legal guarantee of at least two years, and their return costs stay with you.
- Since June 19, 2026, where an EU customer has a legal right to withdraw from a purchase made through your online store, you must offer an online withdrawal function and confirm each withdrawal on a durable medium such as email.
Health, fitness and safety claims need evidence, “Made in USA” has a strict meaning, and the FTC’s 2024 rule on consumer reviews bans fake reviews and paying for positive ones.
Intellectual Property and Trademark Checks
Selling a product that copies a brand’s name, logo, character or design can lead to takedowns, payment holds and lawsuits, and your store can face those claims even when the supplier made the goods. Search the brand and any distinctive design in the USPTO and EUIPO databases, and use photos you have rights to. Naming a brand to describe genuine goods accurately can be allowed, but implying an official affiliation, selling goods not meant for that market or breaking a platform’s brand rules can still get listings removed.
Business Setup and Privacy Rules
Check what your business structure needs where you’re based: some sellers must register an entity or business name, and most need the tax registrations and permits that apply to them. If you’re in the US, our guide on whether you need an LLC for dropshipping covers the options.
GDPR applies when you target EU customers. In the US, CalOPPA requires a posted privacy policy on sites that collect personal data from California residents, and broader state privacy laws apply once a business passes their thresholds.
Pre-Launch Dropshipping Compliance Checklist
- Name the product, model, supplier, destination and sales channel.
- Confirm your sales tax or VAT position and any nexus for that destination.
- Get a delivered-cost quote with duties, clearance and handling fees, and agree who pays.
- Collect safety documents for the exact model, confirm certificate eFiling for US imports and prepare local-language labels.
- Check trademarks, design rights and image rights.
- Write claims you can back up and a delivery window you can meet.
- Publish return terms, an EU withdrawal function where required and a privacy policy.
- File invoices, certificates, test reports and customs papers, and recheck when anything changes.
Bring in an accountant before registering for tax in a new market, and a lawyer for regulated categories or takedown notices.
Dropshipping Regulations FAQ
Does an overseas supplier change my sales tax?
No. US sales tax depends on where your customers are, whether you have economic or physical nexus in their state and whether the product is taxable there.
Who pays import duties on a dropshipped order?
It depends on the shipping terms. Under DDP the seller handles clearance and duties; under DAP the customer takes on clearance and import charges by contract, although for IOSS imports the IOSS holder or its representative still has to act as declarant. The importer of record named on the entry is liable to customs.
Do I need an EU responsible person?
For products covered by the GPSR, yes, unless the manufacturer is established in the EU. An importer or authorized representative can fill the role, and a fulfillment service provider only when none of them exists.
Dropshipping Compliance: Where to Start
Run your best-selling product through this checklist before you scale it, and check it again whenever a supplier changes the product’s materials, components or packaging, since that can change which safety and labeling rules apply.
