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- Knowledge Base - VAT in Europe
- EU VAT Rates, the Formats & the Thresholds
- Amazon Fulfilment in Europe (FBA)
It is very clear for VAT legislation when it comes to goods being delivered or ‘fulfilled’ from a location in an European Union country. If you store your inventory in a distribution centre and you fulfil online sales from this location, the sales are instantly taxable in the country where the warehouse is established. There is no revenue threshold - the moment you make a sale you are obligated to register and start charging VAT on those sales. Subsequently Amazon will fulfil your goods from their fulfilment centres in 7 different EU countries, by signing up to their Pan-European option you will require to be registered straightaway.
Specifically, Amazon’s service contains the very popular ‘Fulfilment by Amazon’ (FBA). This is where a seller can advertise their products on the Amazon site and all orders will be fulfilled by Amazon on their behalf.
For online retailers of goods to consumers, FBA offers a fast and simple way to increase their market potential to the 28 EU Member States and beyond. Nevertheless, selling across EU borders brings the accountability to charge and remit sales tax on all goods. This Pan-European FBA model was implemented in 2016, which allows a seller to use all 7 dedicated fulfilment centres across the EU (The Czech Republic, France, Germany, Italy, Poland, Spain and the UK).
Even though this brilliant service permits a seller to touch buyers across the EU, it does give rise to several VAT registration obligations. Specifically, an online seller must register for VAT in every country where they make use of Amazon’s fulfilment centre in that country.
amavat® recognises all the significant concerns of selling with Amazon in the EU and has the experience from working with several online retailers. Contact amavat® today to make sure VAT doesn’t affect your expansion plans.
When you have registered, online sellers must add VAT to the sales price of their products and abide by all local compliance and reporting requirements, definitely filing periodic VAT returns.
amavat® offers comprehensive eCommerce VAT solutions.