FAQs & Info

FAQs & General information for online sellers using Fulfillment by Amazon (FBA)

What information do you require to register my business for VAT?

amavat Europe have put together a separate document which highlights all the necessary requirements which we would require to register your business for VAT in either one, or all seven countries we have operating offices. Please contact our country experts.

Why appoint a tax agent for VAT?

The appointment of a tax agent ensures for the proper settlement of VAT tax to companies having their official seat in one of the states of European Union that perform activities subject to VAT tax in other European states.

Below are examples of taxable activities:

  • Intra-Community deliveries and purchases to and from other member states,
  • Import and export to and from the territory of European Union,
  • Construction services and services related to real estate,
  • Storage of goods and consignment stocks,
  • Distance sales in the case of exceeding thresholds (please click here to view Distance Selling Thresholds),
  • Sales to consumers and other entities who are not VAT payers,
  • VAT settlement based on the ‘reverse charge’ principle,
  • Certain purchasing/reselling operations.

If you perform one of the business operations listed above, you are probably obliged to register for VAT purposes in a given Member State. By obtaining a local VAT number you will be able to ensure the correct settlement of output and input tax.

To this end you may appoint a tax agent like amavat Europe who will assist you with any administrative formalities, ensuring full compliance with local legislation and protection against loss of the possibility of VAT recovery or being charged with penalties in case of a violation of tax regulations.

What is the role of a tax agent?

  • A tax agent carries on your behalf all of the formalities required for registration for VAT purposes (drawing up forms and registration documents in the scope of VAT tax, ordering translation services, and support with procedures until receipt of a local VAT number).
  • Duties of a tax agent include : submission of tax declarations (both VAT declarations as well as recapitulative statements of intra-community trade), submission of requests for tax returns, submission of statistical declarations (Intrastat) and managing VAT payments (informing on the amount of due VAT payments).
  • A tax agent ensures compliance with tax regulations beginning with the analysis of a given case, through the control over correctness of documents, to the provision of information on all of the obligations of the taxpayer on an on-going basis (issuing invoices, amendments to regulations).
  • A tax agent manages all correspondence and exchanges with tax authorities and is also present to assist, at the client’s request, during a tax control.

A tax agent or a tax Representative? To learn more about differences between a tax agent and a tax representative, please contact amavat Europe click here for details.

Why appoint a tax representative for VAT?

Companies with their official seat outside of the European Union that perform activities subject to VAT tax in one of the EU member states are obligated to appoint a tax representative.

Here is a list of taxable activities:

  • Intra-Community deliveries and purchases to and from other member states,
  • Import and export to and from the territory of European Union,
  • Construction services and services related to real estate,
  • Storage of goods and consignment stocks,
  • Distance sales to another member state (please click here for Distance Selling Thresholds),
  • Certain purchasing/reselling operations.

If you perform one of the business operations listed above, you are probably obligated to make registration for VAT purposes in a given member state.

To this end you should appoint a tax representative who will undertakes all administrative formalities for you. The appointment of tax representative is the condition for granting a local VAT number in a given EU member state.

What is the role of a tax representative for VAT?

  • A tax representative carries out on your behalf all the formalities required for registration for VAT purposes (drawing up forms and registration documents related to VAT tax, ordering translation services, support with procedures until the receipt of a local VAT number).
  • Duties of a tax representative include: submission of VAT tax declarations (both VAT declarations, as well as, recapitulative intra-Community statements), submission of requests for tax refunds, submission of statistical declarations (Intrastat) and managing VAT payments (informing clients on the amount of VAT due).
  • A tax representative ensures compliance with tax regulations beginning with the analysis of a given case, through the control over correctness of documents and ending with the provision of information about all of the obligations of the taxpayer on an on-going basis (issuing invoices, amendments to regulations…).
  • A tax representative manages all correspondence and exchanges with tax authorities and is also present to assist, at the client’s request, during a tax control.
  • A tax representative is liable together with the taxpayer for tax obligations and it may therefore be necessary to establish a deposit or bank guarantee.

A tax representative or tax agent? To learn more about differences between a tax agent and a tax representation, please contact amavat Europe click here for details.

What are the consequences regarding VAT with an intra-community transfer of my products/stock when using Fulfilment by Amazon (FBA)?

Holding stock in an Amazon fulfilment centre

amavat Europe have many marketplace sellers who are approached by Amazon to put their stock in one of Amazon’s European Fulfilment (FBA) centre’s, of which they have 7 country FBA centre’s in 7 countries around Europe. Please click here.

It makes commercial sense by giving you the competitive edge by ensuring cheaper and quicker delivery to your EU customers. However, be warned, by moving your stock to another EU country, you have now created a taxable supply and will have to register in that country immediately – there are no thresholds to exceed.

The EU tax authorities have been extremely pro-active in approaching Amazon for sales data, for example, UK companies holding stock at FBA centre’s. Please be aware of your exposure as the tax authorities communicate with each other and share data.

What are the differences when you sell to customers located inside the EU or outside the EU?

There are 2 types of customers when you are selling goods online to private consumers – those within the EU and those outside the EU.

Inside the EU

Let us set the scene, you are doing really well as an Amazon Seller i.e. in the UK, then Amazon approaches you and asks if you would like to sell in mainland Europe, they can extend your shop’s exposure to 3 or 4 countries inside the EU.

Logistically nothing changes, you send your goods to their UK fulfilment centre and they do the rest. Great – you start getting French and German customers.. Should you worry about adding VAT? The answer is YES.

By selling to private consumers in Europe, you are now governed by the EU Distance Selling Rules. These rules apply to you even if you are sole trader, a limited company, or an individual selling online.

These rules state that you charge UK VAT on any EU sales to private consumers until you exceed set thresholds set by the different countries. The thresholds for most EU countries is only 35,000.00 EURO or equivalent, except for France, Germany, Luxembourg and the Netherlands – whose thresholds are 100,000.00 EURO.

Once your sales (include delivery costs in the calculation) reach the thresholds in any country, you have an obligation to VAT register there and comply with the ensuing VAT return requirements. Failure to do so will and does lead to interest and penalties being applied.

If you are not VAT registered here in the UK, you don’t charge VAT. Though you do have to monitor your EU sales as if you do exceed the threshold in another country you will have to VAT register there (even though you are below the UK threshold here) and charge that country’s VAT on those sales.

Also, be aware that a different VAT rate may apply, for example, in the UK, children’s clothing is zero-rated, whereas elsewhere in the EU, it may attract a country’s standard rate.

VAT rates range from 17% (Luxembourg) to 27% (Hungary) across the EU – again, accounting for the variations within your margins from the start can ensure you remain competitive in every country.

Outside the EU

If you get customers outside the EU, as long as you can prove the export happened, you do not charge VAT on that sale.

Do I need an EU VAT number for amazon sales?

If you are selling goods to consumers in other EU countries via the internet by Fulfillment by Amazon (‘FBA’), then you will probably need to VAT register in the countries of your customers. But the good news is that you will not have to set up any foreign subsidiaries to trade.

NOTE: there is currently no such concept as a single EU VAT number for FBA sellers of goods to consumers. You will have to consider VAT registering in each of the 28 member states of the EU separately. There is an initial experiment with a single EU VAT registration for providers of e-services to EU consumers since the start of 2015. This may be extended to goods and FBA sellers at some point in the future.

When do you need to VAT register in another EU country?

If you are already VAT registered in your home country, then you won’t need to immediately register for VAT in the countries of your customers to sell to them. The European Union, which sets the overarching rules for VAT in the 28 member states, has set VAT registration thresholds for foreign FBA sellers. If you are selling below these annual thresholds in a particular country, then you don’t need to register there and you can charge the VAT under your own domestic VAT number.

You can check these distance selling VAT registration thresholds here.

Once you exceed the threshold in a particular country, you will have to VAT register in the target country as a non-resident VAT trader. Under the EU’s Single Market rules, this enables you to sell in a given EU state without the need to set up a local company. However, you still need to charge the local VAT rate and remit it to the local tax authorities because the EU has not harmonized its state tax regimes.

In addition to needing a VAT registration for exceeding the distance selling thresholds, you will also require one if you are storing goods in a foreign Amazon warehouse prior to sale to local consumers. Read our section on VAT on foreign Amazon warehousing. An example of how distance selling thresholds work. For example, if you are based in France with a French VAT registration number, you sell your goods to French consumers at 20% French VAT.

If you start selling to Germany and Spain, and your sales are below their registration thresholds, then you sell to the consumers there at 20% French VAT and pay the collected VAT to the French tax authorities. Once you go over the country limits (Germany €100,000; Spain €35,000 per annum) you must register your French company with the tax authorities in Germany and Spain. They will give your French company German and Spanish VAT numbers. In tax terminology, you have become a ‘non-resident’ trader or entrepreneur. You must then start charging your German and Spanish consumers 19% and 21% VAT, respectively, and remitting it to the local tax authorities.

In summary

  • Any non-EU business selling goods within the EU will need to register in the country in which they hold goods,
  • Any EU business that has breached their local VAT registration threshold will need to register locally,
  • Any EU business that has breached the distance selling threshold in another EU member state will need to register in the destination country in which the threshold was breached,
  • Any non-resident EU business storing goods in, and selling goods from another EU member state will need to register in the country where the goods are held.

How to get an EU VAT number for Amazon selling?

You may need to obtain a foreign EU VAT number as a Fulfilment by Amazon (‘FBA’) seller because you have exceeded the VAT distance selling registration threshold, or because you are storing goods at one of Amazon’s foreign warehouses.

There is currently no such concept as a single, EU-wide VAT number for sellers of goods to consumers. There is an early-stage experiment with this for sales of electronic services to consumers since the start of 2015. This may be spread to goods at some point in the future.

What do the tax authorities require?

Each country will have specific requirements for applying for a local VAT number.

Typically this will include:

    • Company formation documents,
    • Proof of VAT registration in resident country (or taxable status for non-EU sellers),
    • An outline of your plans to sell in their country, including budgets,
    • Evidence of sales contracts to prove you are a genuine trader,
    • Proof of identification for the signatories of the company,
    • The tax authorities will provide a VAT number application form for you to complete. This will almost always be in the local language.

Contact amavat Europe to find out the country-by-country details for VAT number applications.

Selling on Amazon and not based in the EU?

Online retailers based outside of the EU who are using Fulfilment by Amazon (‘FBA’) face differing obligations to those resident within one of the 28 states of the European Union. The good news is that they can still sell to consumers without forming a company in the EU, but they will still need to register for VAT in the countries where they are selling.

The exact requirements for non-EU FBA retailer depend on where the goods are being dispatched from when a customer makes an online order.

Goods outside of the EU – If the goods are held at the non-EU seller’s location, then the goods have to first clear through EU customs. The seller can do this when the goods arrive at an EU country for the first time. They can pay the import VAT and customs duty to bring the goods into the EU for onward delivery to their customer. If the seller wants to reclaim the import VAT, then they must VAT register in the country where the goods are being cleared. Otherwise, the seller must absorb the import VAT as a cost, as well as the import duty.

Alternatively, the non-EU seller can force their customer to settle the import VAT and customs duty. Typically the delivery agent will charge the customer this amount before they hand over the goods. Whilst simple, this does often deter customers from repeat business with sellers.

Goods inside the EU – If a non-EU seller want to hold stocks of goods in the EU at an Amazon warehouse, this will require a VAT registration in the country of the warehouse. The seller can then use this number to sell the goods to EU consumers. Once the seller exceeds the distance selling thresholds, they will have to register in more EU countries.

How distance selling thresholds work?

For example, if you are based in France with a French VAT registration number, you sell your goods to French consumers at 20% French VAT.

If you start selling to Germany and Spain, and your sales are below their registration thresholds, then you sell to the consumers there at 20% French VAT and pay the collected VAT to the French tax authorities. Once you go over the country limits (Germany €100,000; Spain €35,000 per annum) you must register your French company with the tax authorities in Germany and Spain. They will give your French company German and Spanish VAT numbers. In tax terminology, you have become a ‘non-resident’ trader or entrepreneur. You must then start charging your German and Spanish consumers 19% and 21% VAT, respectively, and remitting it to the local tax authorities.

In summary

      • Any non-EU business selling goods within the EU will need to register in the country in which they hold goods,
      • Any EU business that has breached their local VAT registration threshold will need to register locally,
      • Any EU business that has breached the distance selling threshold in another EU member state will need to register in the destination country in which the threshold was breached,
      • Any non-resident EU business storing goods in, and selling goods from another EU member state will need to register in the country where the goods are held.

When do you need to VAT register in another EU country?

If you are already VAT registered in your home country, then you won’t need to immediately register for VAT in the countries of your customers to sell to them. The European Union, which sets the overarching rules for VAT in the 28 member states, has set VAT registration thresholds for foreign FBA sellers. If you are selling below these annual thresholds in a particular country, then you don’t need to register there and you can charge the VAT under your own domestic VAT number.

You can check these distance selling VAT registration thresholds here.

Once you exceed the threshold in a particular country, you will have to VAT register in the target country as a non-resident VAT trader. Under the EU’s Single Market rules, this enables you to sell in a given EU state without the need to set up a local company. However, you still need to charge the local VAT rate and remit it to the local tax authorities because the EU has not harmonised its state tax regimes.

In addition to needing a VAT registration for exceeding the distance selling thresholds, you will also require one if you are storing goods in a foreign Amazon warehouse prior to sale to local consumers.

What are the German VAT invoice requirements?

The German tax law and VAT invoicing requirements are both very strict. The German rules conform with the obligations of the EU VAT Directive and its VAT invoice requirements.

An invoice which is subject to the German VAT must include at least the following information:

      • Date of issue,
      • A unique, sequential number,
      • The VAT number or the VAT ID number of the supplier / service provider,
      • Full address of the supplier / service provider and the customer,
      • Full description of the goods or services provided,
      • Details of quantities of goods, if applicable,
      • The date of the supply or the date of the service provided,
      • The net, taxable value of the supply / service,
      • The VAT rate applied and the amount of the VAT,
      • Specific details to support zero VAT – export, reverse charge or intra community supply,
      • The total, gross value of the invoice.

Only if all these above requirements are fulfilled a VAT refund for the customer is possible, or a zero rated invoice can be issued.

amavat Europe can provide assistance by reviewing your invoices according to the German VAT law.

How much do you charge for professional fees in each country?

Our fees at amavat Europe are shown here. These are subject to consultation and further agreement between two parties.

Can I get my VAT invoicing automated for my FBA orders on Amazon?

If you are fulfilling orders in an EU marketplace using Fulfillment by Amazon (FBA) for sales on Amazon’s website, consider investing in automating the creation of VAT invoices for your buyers. Amazon does not issue VAT invoices on behalf of sellers and it is your sole responsibility to comply with all legal and VAT requirements for issuing VAT invoices to buyers in respect to your sales transactions. If you are unsure as to whether you have to issue a VAT invoice to a buyer in Poland please contact amavat Services Poland, we would be happy to clarify your questions. Amazon cannot assist you with legal or tax advice. Buyers can include in their Seller Feedback your customer service in relation to their VAT invoice requests.

You can use the Amazon’s FBA Fulfilled Shipments Report, from the Reports API section, to get important buyer information such as the ship to address and the billing address for your FBA-fulfilled sales on Amazon’s website. The report also contains the amounts charged to the customer for shipping and gift wrap services.

Is it possible to get combined multiple shipments from a single order on to one invoice?

A single customer order can contain multiple shipments. If you want to combine all of the shipments from a customer order into to a single invoice, you can use the FBA Fulfilled Shipments Report and the ‘All Orders’ reports from the Reports API section. If the shipments from a single customer order are spread across multiple FBA Fulfilled Shipments Report reports, you can use one of the ‘All Orders’ reports from the Reports API section to return order item identifiers from a single customer order.

You can then cross reference the order item identifiers from the ‘All Orders’ report and from one or more Fulfillment by Amazon (FBA) reports to obtain the ship to address and billing address for the items in single customer order.

Please take into consideration that the information provided by amavat Europe in our FAQ pages was updated on 24th March, 2016, we are not responsible for any changes made in the law after this date.

European VAT considerations

Selling in Europe provides opportunities to reach many countries from a single account, so it’s important that you understand how the European Union applies Value Added Tax (VAT) to orders made online.

The VAT

As described by the European Commission, the VAT in the European Union (EU) is a consumption tax assessed on the value added to goods and services. It applies to goods and service that are bought and sold for use or consumption in the EU. Although goods that are sold for export or services that are sold to customers abroad are normally not subject to VAT, imports into the European Union are taxed.

Value Added Tax is charged to the buyer as a percentage of the price of the goods sold. The seller of the goods transfers the collected VAT to the revenue authorities but can deduct the amount of VAT it has paid to other “taxable persons” on purchases for business activities.

Learn more about the Value Added Tax (VAT).

How is VAT charged?

Registered VAT traders with a VAT number must show the VAT collected from customers on invoices. Customers will know how much VAT has been paid on the final product, and customers who are registered traders themselves will know the amount that can be deducted from VAT due to tax authorities.

VAT coverage and VAT rates

European law requires a minimum standard VAT rate of 15% (or at least 5% for the reduced rate), and actual rates vary between EU countries and between types of products. Consult a particular country’s VAT authority for current VAT rates for the products you want to sell.

VAT on imports and exports

When selling products into Europe or from one European member state to another, you should be aware that the tax rate can be different from country to country. If you transfer your own goods from one European country to another, or if Fulfillment by Amazon (FBA) transfers your goods from a fulfillment center into another country where your products were stored, the transfer may also be treated as a transaction subject to VAT. You are responsible for meeting any VAT obligations that apply, including VAT obligations in the Amazon marketplace locations, the country to which you are delivering or shipping your products, or any other countries.

Tip: If you’re selling in multiple Amazon European marketplaces, you may need to apply for a unique VAT number in each of the member states in which you sell. Please see the Other Resources for additional VAT information by country.

If you import products into the European Union, you may be obliged to pay VAT the moment the goods enter Europe – and in the destination country where you ship the goods. VAT is usually payable in the member state of import by the declarant. You will be liable for the import VAT at the time of delivery of the goods unless you have entered into an arrangement with your supplier for the import VAT to be included in the price of the goods, and for the supplier to discharge the obligation by making a payment to the relevant tax authority.

If you are a company not established in Europe and ship your products from a non-European country directly to a customer in a European country, or you ship your products into a European fulfillment center, please consult your tax advisor to assess any import and VAT obligations you may have.

Goods sold for export to customers outside of Europe may not be subject to European VAT.

External Resource: European Commission

Registering for a VAT number and filing VAT returns

When you sell your products in Europe, you may need to charge VAT. You may need to request a VAT registration number, file VAT returns, and pay the VAT you collected from your customer to the tax authorities.

In most European countries, you can register online on the tax authority’s website for the country where you want to register. Most of these websites provide the VAT information in English. The website will usually provide an online form for registering or a PDF form you can download to complete and return by mail. If there is no provision for registering online, you can find out where to go to register for a VAT number. After you have submitted your request for a VAT number, you may also be sent forms to sign and return through postal mail.

Registering for VAT may lead to a number of associated compliance requirements, including the need to file reports and issue VAT invoices.

Registering for VAT in multiple countries

Registering for VAT may be required depending on the level of your sales as well as where your inventory is stored. You should consult your tax advisors as to your VAT registration requirements based on your individual seller set up.

When you sell products to customers from your inventory stored in Europe, you may need to file VAT returns in the country from which you ship your products, and you may be required to file VAT returns in the country to which you ship your products (when exceeding the threshold for so-called « distance selling »).

Distance selling of goods

Distance selling is when you sell goods from one European Union country to customers in another European country where, generally speaking, these customers are private individuals without undertaking any business activity for VAT purposes.

The « distance selling threshold » is a value in Euros established by each country in Europe. If your sales that you ship from one country into another country are greater than that country’s threshold, you must register for VAT in that country. You are responsible to report, collect, and pay the VAT in that country.

Please note that the distance selling threshold is not a sum total of all your sales across Europe. Each European country has a distance selling threshold, and these thresholds vary from country to country. Consult with a tax authority for the country where you want to sell your products to verify the distance selling threshold.

VAT invoicing

In many European countries, customers expect a VAT invoice. VAT laws in the country where the customer is located may require you to provide a VAT invoice, and customers’ expectations usually go beyond the law. In Germany and Italy, for example, customers often expect an invoice for high-value items.

For more information about VAT invoicing in Poland please do not hesitate to contact us.

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