Amazon De VAT paid to UK Vat HMRC

[Leeds66]

Hi

We have been trading on amazon.de since 2012 to 2016 and wrongly paid the German VAT and included it to our UK turnover and paid HMRC.

To add the turn over for 2012 was €102.445 and €101,675 for 2013.

2014 to 2016 was roughy €40,000 each year

Can we claim this back from HMRC as this was a mistake and we need to repay it to German VAT.

We have calculated the german VAT to be roughly £50k and I'm pretty sure we can not reclaim the VAT back from HMRC due to the 4-year limitation.

The concern is that the German VAT office may pursue this and use MARD to reclaim the unpaid VAT for which by mistake was paid to Germany.

If this was pursued under MARD whats the chances of HMRC chasing the debt on behalf of Germany when we already paid it to HMRC?

If HMRC did chase do we have a leg to stand on if we were to legally challenge it?

Bit pissed as we were not aware we had to be registered and literally just over the limit.

Any help appreciated

 

[billybob99]

Complicated stuff.

You really need to pay a professional bean counter for professional advice here.

Or you'll be getting yourself into a größeres loch.

 

[Mr D]

Think this is one for your accountant to deal with.

 

[Leeds66]

We are speaking to our accountant for further assistance.

Fingers crossed as I'm aware we can claim 4 years overpaid VAT but its the rest we need to try and claim so we can pay the german vat

 

[Scalloway]

You can't claim German VAT through HMRC.

 

[Leeds66]

You can't claim German VAT through HMRC.

Yes we are aware but we can claim back the overpayments up to 4 years that were meant to be paid to German VAT.

 

[AMS79]

Yes we are aware but we can claim back the overpayments up to 4 years that were meant to be paid to German VAT.

Was wondering if there has been an outcome to this issue or what line Hannover have taken on this?

We are facing a similar problem. We were oblivious of the distance selling thresholds until 3 / 4 years ago and registered for VAT in Germany as soon as we passed the threshold in 2019. The problem is that Hannover have advised that records from online marketplaces show that we had actually exceeded the threshold in 2013 and 2014. VAT was charged and remitted during those years but at 20% and to HMRC since we were unaware we had an obligation to register in Germany.

Hannover have asked why we haven't submitted a return for those two periods. We shall have to hold our hands up but not too sure where we stand in recovering the VAT paid 7 / 8 years ago from HMRC so that it can be paid to Hannover.

 

[Spur Support Services]

You really need to seek advice properly from your accountant.
You are essentially probably out of time with HMRC if the 4 year limit has expired, although it never hurts to ask.

I'm not sure I'm reading your post right. I am unsure whether you paid the German Tax and the UK Tax at the correct historical moment or you are just being pursued for the German VAT now.
If the latter, seek advice from the German VAT advisers to see if they have a similar time limit on the collection of the historic German VAT. As VAT is a European tax, you would hope that there would be a significant level of harmonisation, however, our UK HMRC are more pragmatic than some jurisdictions.

 

[AMS79]

You really need to seek advice properly from your accountant.
You are essentially probably out of time with HMRC if the 4 year limit has expired, although it never hurts to ask.

I'm not sure I'm reading your post right. I am unsure whether you paid the German Tax and the UK Tax at the correct historical moment or you are just being pursued for the German VAT now.
If the latter, seek advice from the German VAT advisers to see if they have a similar time limit on the collection of the historic German VAT. As VAT is a European tax, you would hope that there would be a significant level of harmonisation, however, our UK HMRC are more pragmatic than some jurisdictions.

Thank you very much for your reply.

To clarify, we are a UK company and have been registered for VAT in the UK since 2011. We weren't aware of the EU VAT registration thresholds until at least 2017. From that point on, we monitored our EU sales and when exceeded the German threshold at the end of 2018 we duly registered at the beginning of 2019 and have submitted a German return every month since.

We submitted our German annual return for 2019 recently and Hannover have responded stating our return is wrong and that they have received sales information from online marketplaces indicating that there were taxable sales made in the years 2013 and 2014. They have asked for an explanation as for the lack of a return submission for those years.

Rather shocked to be informed of this, we downloaded sales reports from Amazon from those two years and low and behold we did indeed exceed the threshold in both. Since we didn't know about the EU VAT thresholds at the time, we thought we were correct in charging VAT at the UK VAT rate on all Amazon.de sales and remitting it to HMRC. It didn't even cross our minds that we had exceeded a VAT threshold in Germany and needed to register there as well.

So we are now going to inform Hannover of this but I'm not sure what they are going to say. If they demand we pay the VAT owed, we would hope to be able to explain ourselves to HMRC and recover it so that it can be paid to Hannover. Unless Hannover can make a direct request for payment from HMRC and the correction made that way.

In essence, VAT has been charged on these sales but it has been paid to the incorrect authority.

 

[Spur Support Services]

I really do feel for you and I think more accountants should think VAT.
Thresholds vary across the EU. Many countries such a France need particular care as their threshold is much lower than Germany. https://ec.europa.eu/taxation_custo...at/traders/vat_community/vat_in_ec_annexi.pdf

Plus the whole board game will change from 1 July 2021 when Germany, France and the rest of the EU implement the amendments to the Distance Selling Directive, which move the responsibility for accounting for VAT on Online Marketplace sales to the Online Marketplaces itself, although there still may be variations between implementation strategies.
The UK implemented the directive from 1 January 2021 to align with Brexit, but the EU delayed their implementation due to Covid19.
The truly cynical amongst us would say the delay was partly politically motivated within the EU to increase the pain of Brexit exponentially for eCommerce sellers in the UK.

We are in a bit of a limbo land, plus there continues to be a risk that there will be another Covid19 delay to the EU implementation of the directive, but I'm so hoping that there isn't.

 

[Pish_Pash]

I'm in a similar situation...in dec 2020 I breached the threshold in Germany by €7k (wasn;t aware until now...a late and agressive buying splurge by German customers in November/December so me breach it)...my problem is now I've got to apply for a German VAT ID...I can feel some awkward questions coming on!

 

[Pish_Pash]

I'm in a similar situation...in dec 2020 I breached the threshold in Germany by €7k (wasn;t aware until now...a late and agressive buying splurge by German customers in November/December so me breach it)...my problem is now I've got to apply for a German VAT ID...I can feel some awkward questions coming on!

replying to my own post (& not exactly related to the OP), but two things to bear in mind...

1. Even though my Amazon.de sales report for 2020 showed €111,000 ....only €98000 of that was to customers within Germany (therefore I was unfer the distance selling threshold).

Also, I (& two others who replied to a related thread I posted) reckon that you need to deduct retruns/refunds from that turnover...therefore my sales to German Customers in 2020 on Amazon.de goes down to €89,000 .....big phew.

 

[Leeds66]

replying to my own post (& not exactly related to the OP), but two things to bear in mind...

1. Even though my Amazon.de sales report for 2020 showed €111,000 ....only €98000 of that was to customers within Germany (therefore I was unfer the distance selling threshold).

Also, I (& two others who replied to a related thread I posted) reckon that you need to deduct retruns/refunds from that turnover...therefore my sales to German Customers in 2020 on Amazon.de goes down to €89,000 .....big phew.

Hi

Sorry i get the feeling the information is not correct.

We have been informed its total sales and not after refunds

 

[Scalloway]

We have been informed its total sales and not after refunds

Do you have a reference for that? The normally accepted definition of turnover is sales less refunds.

 

[Leeds66]

Do you have a reference for that? The normally accepted definition of turnover is sales less refunds.

i will double check tomorrow as I'm sure the german accounting firm mentioned €100k reg limit was total sales

 

[Pish_Pash]

if you've refunded the order ...it's not a sale

(also bear in mind it's not all your Amazon.de sales that should be totalled up ...only those sales to those living in Germany that counts. In my own case, 10% of my Amazonde sales were to customers outside of Germany))