The Essential Amazon VAT Guide for Online Sellers
Every successful e-tailer who wants to ensure they’re on top of international tax compliance needs an Amazon VAT Guide for online resellers to help them get started on the complex world of international VAT registrations and compliance.
What are the Amazon VAT Implications for Online Sellers?
As an online seller or distance seller, you may be expanding your global reach, delivering products to consumers across the globe but you’ll need to understand the tax implications of all this. Put simply, one cannot sell goods to another country without being registered for VAT. The taxman always comes knocking. But you’ll be fine. You have this Amazon VAT Guide at the ready.
How Do I Know if I Need to Register for VAT as an Amazon Seller?
An Amazon Seller’s VAT obligations will vary depending on three fundamental factors:
- The import and customs clearance process used
- The delivery solution employed to fulfil orders
- The annual revenue per destination country
What are the European Amazon VAT Registration Requirements?
According to European law, if your business sells goods directly to customers (B2C) via the internet (in your case, it’s via Amazon), your business will be obliged to register for VAT, when:
1. You Take Ownership of Stock in a Foreign Country
If your goods are stored in foreign European warehouses or fulfilment centres – you will be required to register your business in those European countries the moment your stock is stored. If you use Amazon’s FBA or Pan-European FBA service, you will definitely be required to register for VAT but we’ll go into more detail on this further down.
2. Breaching a Country-specific Sales Threshold
If you are exporting goods from your local jurisdiction into EU countries (this includes intra-EU), you will be required to register in those foreign countries once you breach the country-specific sales thresholds. For example, if your e-commerce business is based in the Netherlands, and you sell into other European countries, without holding stock in those countries, you will be required to register once those country’s' sales thresholds are breached.
What is Amazon’s FBA service?
In order to really understand what the Amazon VAT implications of FBA are let’s first explain what FBA is within the context of VAT. FBA stands for Fulfilment by Amazon (“FBA”). The service provides a group of fulfilment solutions designed to empower sellers to trade faster and easier across Europe and the US.
Selling on Amazon enables businesses of any size to sell their products on all the European and USA Amazon marketplaces (amazon.com, amazon.uk, amazon.de, amazon.fr, etc.) Once goods are listed on the marketplace, the seller must decide how the orders will be fulfilled to customers around Europe.
What is Amazon’s Pan-European FBA service?
The Pan -European FBA enables Amazon etailers to sell across Europe by helping them place inventory closer to their European customers. Opting for this model means you must allow Amazon to store your goods in and fulfil orders from their 7 main distribution centres (UK, Germany, Spain, France, Italy, Poland & Czech Republic).
What are the Amazon VAT Obligations if I Use the FBA Service?
In almost all cases, there will be the need to charge VAT or sales tax in every country or state where you use an Amazon fulfilment centre. To expand, using their fulfilment centres creates an immediate legal obligation for Amazon VAT registration and compliance.
What are the Amazon VAT Obligations if I use the Pan-European FBA Service?
Although the Pan-European FBA service has enormous benefits for online sellers, using the Pan-EU FBA will immediately obligate you to be VAT registered in all 7 countries.
What Does It Mean to be a VAT Registered Amazon Seller?
Once you register for VAT in each country, you will be obliged to:
- Charge the relevant VAT on all your Amazon sales
- Pay the VAT you charge over to the tax authorities
- Comply with the local tax legislation
- File regular VAT returns on a monthly or quarterly basis.
Amazon VAT Specialists That Can Help Your Business
vatglobal is able to offer specific Amazon VAT advice and assistance with the entire registration and compliance process no matter the country. We’re also a preferred Amazon advisor for online sellers with direct integration with the Amazon Seller Portal for easy data extraction.
It’s true that there is very little glamour in the life of an online seller. If you’re getting it right, then you’re mainly overseeing logistical issues and fulfilling customer orders. So we understand that the extra burden of having to deal with your international Amazon VAT obligations can be a real administrative nightmare.
Ultimately, you don’t need to figure this out on your own. To start, you can download the full Essential Amazon VAT Guide for Online Sellers by leaving your details on this page.
Alternatively, you can get in touch with us and we’ll hold your hand throughout the Amazon VAT registration process. Think of vatglobal as your one-stop-shop for VAT registrations, VAT return filing and compliance support in over 50 countries around the world.