Amazon has 5 “marketplaces” in the EU – based on the location of its warehouses in the UK, France, Germany, Italy and Spain.
If you are a non-EU based seller
You will have to register for VAT in the country where your goods are held and orders despatched from. There are no de-minimis VAT thresholds (e.g the UK’s current £83,000 VAT threshold) for non-resident sellers. Many non-resident sellers remain under the impression that unless their sales levels in a particular EU member reach a certain level, there is no obligation to register for VAT. That concept is incorrect. E.g. USA or Chinese sellers holding stock at FBA UK will have to register for VAT even if they make just £1 of sales to UK resident customers.
The same applies if non-EU resident FBA sellers import goods into Amazon warehouses in Germany, France, Italy or Spain – even if they generate just €1 worth of sales in each of these countries. They need to be VAT-registered there for 2 reasons. Firstly, to reclaim “import” VAT on the import of bulk stock into that member state and secondly to account for “output” VAT on domestic sales.
If you are a EU-resident seller
You will probably already have a VAT-registration in your home EU member state. If you are established in one of the 5 above-mentioned “Amazon Marketplace” countries you will charge VAT at your local rate to your home country customers. For B2C sales to customers in a different member state the “VAT distance selling” regime applies. You may be required to register for VAT in the member state of your customer once the threshold (€35,000 or €100,000) in that country has been reached.
Amazon dispatches customer orders for identical items based on availability and location of the FBA warehouse nearest to the customer. Say you are a seller established in Italy, your customer is resident in the Netherlands but Amazon has the choice of despatching the order, based on availability, from its warehouses in either Germany or France. Which country’s VAT do you charge your customer? When and how do you find out where the despatch takes place from?
Due to Amazon FBA’s complex supply chain the answers to these VAT questions is often not easy. What’s the safest way to ensure you do not fall foul of VAT laws in this situation? Please contact us to find out more.