VAT Settlement

VAT Settlement Services

Value Added Tax or VAT is a tax charged on most business-to-business and business-to-consumer transactions in all the countries of the European Union and in a growing number of other countries. The laws establishing the VAT are national laws, therefore all business entities conducting business in Poland have to comply with Polish VAT Act and EU Council Directive 2006/112 on the common system of value added tax.

The complexity of the VAT legislation is a growing concern for businesses. Proper management of VAT and other indirect taxes is essential, especially for companies involved in international trade, as they invariably encounter cross-jurisdictional issues and increasingly complicated tax risks. Therefore, obtaining expert advice is a key to managing VAT as this can positively influence your company’s financial position in the long term. The main goal of an amavat® specialist is to help you maximise savings in finding an optimal VAT position for current or planned business activities. Our experienced specialists will assist you with VAT planning and compliance, as well as VAT scans and local and international advice. The member firms of amavat® also offer advising on procedures, rules and a disputes with the VAT authorities.

What consequences may arise with an Online Seller using FBA?

Amazon (Fulfillment by Amazon) does not take responsibility for trader’s tax issues. VAT, customs and income tax on profits are the sole responsibility of the e-mailer or seller. Traders on FBA therefore need to understand how VAT on cross-border transactions works.

The place of supply of goods (the VATability) in a cross-border B2C supply situation, is in the country where the journey in the goods begins. FBA dispatches customer orders from its local warehouse in the country of the customer or end-user, e.g. dispatches to German customers will take place from FBA’s warehouse in Germany, rather than say from the UK warehouse where the trader may be holding most of his stock. This will require the trader to have a VAT registration in Germany as this is a ‘domestic’ sale rather than a ‘distance’ sale.

There are also VAT issues regarding the transfer of the stock from one EU country to another, in this case bulk stock is transported from the trader’s warehouse in the UK to FBA’s warehouse in Germany. The VAT treatment will depend upon whether this is a transfer of ‘consignment’ stock or ‘call-off’ stock. In certain situations the dispatch will give rise to a ‘sale’ and in others it’s not a sale but just a ‘transfer’.

Due to the complexity and interaction of tax and other legal considerations traders should take advice and plan well ahead. VAT rates across Europe average 20% and losing this amount off the bottom line is not an option for survival!

Features of the VAT settlement services include:

  • Completion and translation of VAT returns for all applicable transactions (i.e. not only Amazon sales),
  • Initial analysis determining if the business has an obligation to register for VAT in an European county for each applicable country,
  • Maintaining VAT registers,
  • Review and submission of VAT returns,
  • Correspondence managing relations with the local tax authority,
  • Co-ordination of any payments owed to local tax authorities by their deadline and arranging relevant VAT refunds owed to online sellers,
  • The member firms of amavat® will provide online sellers with advice on appropriate invoicing compliance for each applicable country.