VAT Guides Industry-specific

Fulfilment by Amazon (FBA)

Several online retailers take advantage of the extensive infrastructure and support offered by the world’s biggest online marketplace, Amazon.

In particular, Amazon’s service includes the very popular Fulfilment by Amazon (“FBA”), where the seller advertises his products on the Amazon site and all orders will be fulfilled by Amazon on their behalf.

For online retailers of goods to consumers, FBA offers a quick and easy way to expand their market potential to the 28 member states of the European Union and beyond. However, selling across EU borders brings the responsibility to charge and remit sales tax on all goods. This tax is known as Value Added Tax (‘VAT’) in the EU.

In 2016, Amazon implemented a Pan-European FBA model, which allows seller to use all seven dedicated fulfilment centres across the EU (UK, Germany, France, Spain, Italy, Czech Republic and Poland).

While this excellent service allows seller to reach buyers across Europe, it does give rise to various VAT registration obligations. Specifically, an online seller must register for VAT in every country where he makes use of Amazon’s fulfilment centre in that country.

VATGlobal understands all the important considerations of selling with Amazon in the EU and has experience working with several online retailers based all over the world. Contact us today to ensure VAT doesn’t ruin your expansion plans.

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