Fulfilment by Amazon (FBA) – Why do I need to register for VAT?

As part of the implementation of the Single Market in the EU, the Member States agreed to various simplifying measures. Most crucially, all duties and taxes on goods imported / exported between EU states were removed. As such, from a VAT perspective, these are not classified as imports and exports, but rather as ‘Intra-community Acquisitions’ and ‘Intra-community Dispatches’

There is specific legislation which governs these intra-EU sales and purchases and even the movement of a company’s own goods between Member States.

Even though VAT not be chargeable or payable upon movement of goods between EU countries, this is classified as a taxable transaction and therefore must be reported in a VAT return. As such, even if you simply move your inventory from one EU country to another for logistics purposes, this may give rise to a VAT registration obligation.

This is particularly relevant if you make use of multiple fulfilment centres (“FC’s”) across the EU (for example, the Pan-European FBA solution offered by Amazon). AT the time of writing, Amazon has 7 FC’s in Europe (UK, Italy, France, Germany, Spain, Czech Republic and Poland).

Signing up for FBA often gives Amazon the legal right to move your goods between and fulfil from all the FC’s. Since Amazon does not always notify you before it moves your inventory to a new FC, sellers often need to get registered in all the member states where Amazon has an FC.

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