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Enrolment into Pan-European FBA or Multi Country Inventory programs triggers additional VAT obligations in multiple jurisdictions and may trigger other reporting requirements such as Intrastat. As a seller, you are fully responsible for the collection and payment of your taxes, as well as for filing of all relevant returns and VAT invoicing.

Whilst it is the sole responsibility of each Amazon seller to be VAT compliant, Amazon is supporting sellers by providing helpful information which includes tax advisory contacts with pre-negotiated discounted rates.

VAT Registration in EU

If you sell goods in any EU country, it is likely that you will be required to register for Value Added Tax (VAT). VAT in the EU is a tax on consumer spending. It is collected by VAT-registered traders on their sales within the EU territory, and passed on to the national tax authorities via VAT tax return filings. Most EU countries allow you to register for VAT online, through the local tax authority’s website.

Whilst it is the sole responsibility of each Amazon seller to be VAT compliant, Amazon is supporting you by providing useful information that may help navigate the VAT regulations within the EU countries. This includes tax advisory contacts with pre-negotiated discounted rates.

Learn more about EU country specific VAT registration thresholds.

When to VAT-register in the UK?

Deciding when you need to VAT-register in the UK depends on the way you conduct your business. Key factors that determine when you have a VAT obligation include country of establishment, location of your inventory or level of sales (also called VAT registration threshold).

 

Here's how you may determine when to VAT-register, depending on where your business is established:

Your business is established in the UK

  • If your business stores goods in the UK and sells to UK based customers, you are required to register and collect VAT once your UK based sales exceed the VAT registration threshold of £83,000.
  • In addition, if your business further sells goods to private individuals in other EU countries you may also be required to register for VAT in those countries.
  • Collected VAT must be reported to the relevant tax authorities by filing VAT returns.

Your business is established
in a different EU country

  • If your EU business stores goods in another EU country, and sells these goods to UK-based customers you are required to register and start collecting VAT on UK sales once these exceed the VAT registration threshold of £70,000.
  • Likewise, moving (or having your goods moved) to a storage location in the UK, triggers instant VAT registration requirements in the UK.
  • Collected VAT needs to be further reported to the UK tax authority via VAT returns filings.

Your business is established outside EU

  • If you sell goods stored in the UK to EU based consumers, you are required to register for VAT in UK immediately.
  • In addition, if you sell goods to private individuals in other EU countries you may also be required to register for VAT in those countries.
  • Collected VAT  must be reported to the relevant tax authorities by filing VAT returns.

How to claim back VAT paid on business expenses

Hillary owns a small business. Whenever she incurs business expenses she can claim back the VAT she pays.
How to claim back VAT paid on business expenses step 1
1
Hillary owns a small business. She has just hired 2 new employees, and she needs to buy 2 laptops for these hires.
How to claim back VAT paid on business expenses step 2
2
Hillary searches online and identifies a laptop model she likes. One laptop costs 1000 GBP. This price already includes VAT. She orders 2 laptops.
How to claim back VAT paid on business expenses step 3
3
The order is delivered and the VAT invoice is attached. As per the invoice, she paid total of 2000 GBP, out of which 333 GBP is the VAT amount collected by the seller.
How to claim back VAT paid on business expenses step 4
4
Hillary's company is VAT registered so she can claim back VAT on company expenses.
How to claim back VAT paid on business expenses step 5
5
Hillary files the VAT returns and she gets back the 333 GBP she paid in VAT when she acquired the two company laptops. 

How VAT works in Europe

How VAT works in Europe

Steve is importing headphones from India (a non-EU country) and plans to sell them in UK. In order to do this, Steve must present the imported products to customs so that he can pay all necesarry import taxes, including VAT and import duty (if applicable).

Learn how VAT works in Europe through Steve's business journey

Getting a VAT number in UK

Once an obligation to VAT-register in UK has been established an application form must be submitted to the UK tax authorities. This process can be carried out online here on the website of HM Revenue & Customs (or HMRC, the department of the UK government responsible for the collection of taxes). At the end of the VAT registration process you will be allocated a VAT number, with which you can:

  • Issue VAT invoices, where you show the VAT collected from customers. In this way, if you are a VAT registered business you are able to recover VAT on most of business expenses (as well as import VAT paid at the time goods are imported into the EU).
  • Start filing VAT returns with HMRC to declare collected VAT and claim back any VAT credit you may have accrued. You can find help with getting registered on our VAT Discounted rates page.

 

  • Issue VAT invoices, where you show the VAT collected from customers. In this way, business customers know how much they can deduct from their purchase, and end-consumers know how much VAT they have paid on the final product.
  • Start filing VAT returns with HMRC to declare collected VAT and claim back any VAT credit you may have accrued.

Hear what sellers are saying

Whenever we first looked at the Pan-European FBA option we knew that we would then have to register for VAT in each of the individual countries that we were going to be holding stock in. So it was a consideration but there are a number of solutions out there and a lot of people with a lot of advice to make that actually flow quite easily. The VAT registration wasn’t a particularly onerous task for us, it is actually just a matter of doing some extra paperwork on a quarterly basis."

Zamir Cajee, CEO
iQualTech

VAT Resources

Discounted rates for Amazon sellers

As part of our commitment to help sellers expand their business across Europe, Amazon is working with leading tax advisory firms to foster the creation of discounted rates programs that could help reduce the cost and complexity of becoming VAT compliant.

One such program has already been launched with the external tax adviser KPMG Global Services Hungary Ltd. KPMG offers Amazon sellers VAT registrations and filings in up to 7 EU countries, including:

  1. Easy 5 step processes to sign up for both VAT registration and reporting services.
  2. Different tax services packages offered with rates starting at €750 per country per year (up to over 70% lower when compared to standard market prices).
  3. Dedicated support by KPMG account managers.
  4. Response time of 24 hours, dedicated hotline in 5 languages and comprehensive FAQs.

To find out more about KPMG’s discounted rates for Amazon sellers, please visit KPMG’s external website and create, free of charge, an account with KPMG

In addition, Amazon currently offers a promotion to Pan-European FBA sellers who, given their immediate needs, will be purchasing until December 31st 2016 a tax service package from KPMG Global Services Hungary Ltd. that includes Poland or the Czech Republic. Amazon will cover costs of VAT registration in Poland and Czech Republic by rebating sellers up to €1800.

Terms and conditions apply, please read more details about the rebate here.

 

Learn more about VAT

Once you have an idea of where you'd like to expand your business, it's time to explore how taxes and regulations might affect your business for each marketplace and country in which you intend to sell and store your products.

To learn more about VAT and how to keep track of it when selling in Europe visit Seller Central. In any case, we recommend that you consult your tax and regulatory advisers before deciding how you will sell in other marketplaces.

External Tax Advisers

In order to help our sellers with more information, we have created a list of third-party tax advisers solely as a resource for our sellers.

To find out more, see External Tax Advisers. Amazon does not provide tax advice or compliance services and does not endorse the services of any tax adviser.

 

Note: Information on this page does not constitute tax, legal, or other professional advice and must not be used as such.