Amazon not charging the VAT for EU orders but expect us to deliver DDP?

Discussion in 'Ecommerce Forum' started by samuel5, Jan 4, 2021.

  1. Spur Support Services

    Spur Support Services UKBF Regular Free Member

    203 42
    France sales are now treated as exports overseas and therefore no longer attract UK VAT. Amazon is automatically calculating the VAT free price for your customer. (as of 1 January 2021)

    France and EU delayed implementation of the EU distance selling directive due to Covid19. The Directive will move responsibility for collecting and paying the VAT to online platforms such as Amazon (expected implementation 1 July 2021). (subject to certain exclusions, such as use of warehousing overseas)

    In the meantime, VAT is added during transit at the border and therefore you need to ensure that all your shipping rates include the VAT charge, where you ship DDP, so that customers don't get a note from their customs office to settle the VAT on collection.

    Massive amounts of care are going to have to be taken with your 2021 UK VAT returns especially any that straddle the 31 December to ensure you don't pay UK VAT by mistake. VAT Compliance is likely to be high risk for the whole of 2021, whilst EU legislative structures change and embed.

    It is well worth looking at your operational sales flows to ensure that sales are segregated between jurisdictions, so that you have complete clarity over the risks.

    I hope this helps
     
    Posted: Feb 15, 2021 By: Spur Support Services Member since: Aug 21, 2020
    #21
  2. Pish_Pash

    Pish_Pash UKBF Ace Free Member

    2,513 649
    I was in an Amazon VAT webinar this morning ...the whole situation is FUBAR.

    get a load of this....I import something from the far east, I pay UK Import Duty & VAT based on my cost price...ok, so now I want to send some of these products to Germany...according to Amazon's experts (in the webinar), the declared value should be what you retail it for ....just imagine the amount of import VAT you're gonna have to outlay ...then have to reclaim (& just imagine just how high the import duty will be based on retail price vs. cost price).

    Amazon are currently touting some 'preferred' tax agents who are offering free VAT registration in EU countries & free VAT submissions for the first year...great - but what if a seller wants to cancel after year 1 ...erhm, in that case they will actually deregister your VAT number with - for example Germany - & you're right back to where you started! (you won't be able to apply for a second VAT number while you original one is current...so you are looking at a 12 week sales void if you decide not to use their service...talk about getting pregnant to someone!)

    About 10-15% percent of my products are returned by customers (thanks to the mentality of a typical Amazon Customer "Hmm, I'll order ...I can always return it after I used it"...get a load of this...to get my products into Germany, I've paid import duty TWICE...now to get my customer return products back from Germany to the UK, I have to pay import duty again!! (they did mention that it may be possible to work with your carrier to avoid re-import duty...but there'd likely be a whopping admin charge to the point of not being viable).

    [​IMG]
     
    Last edited: Feb 15, 2021
    Posted: Feb 15, 2021 By: Pish_Pash Member since: Feb 1, 2013
    #22
  3. Mr D

    Mr D UKBF Legend Free Member

    27,344 3,354
    So increase your German prices to cover the increased costs.
    Or increase all your prices to subsidize your German operation.

    Or do as some Amazon sellers apparently do, reduce your profits in order to keep everything the same.
     
    Posted: Feb 15, 2021 By: Mr D Member since: Feb 12, 2017
    #23
  4. Pish_Pash

    Pish_Pash UKBF Ace Free Member

    2,513 649
    I know what to do (it's not like I'd hadn't thought of the things you suggest) ...but frankly every stone I upturn...has a 'nasty' underneath....the exasperation is strong here.
     
    Posted: Feb 15, 2021 By: Pish_Pash Member since: Feb 1, 2013
    #24
  5. Mr D

    Mr D UKBF Legend Free Member

    27,344 3,354
    Yes, sometimes the choices are far from ideal.
    Been fine tuning our German markets for over 2 years, still needs work.
     
    Posted: Feb 15, 2021 By: Mr D Member since: Feb 12, 2017
    #25
  6. enjoylife

    enjoylife UKBF Regular Free Member

    145 5
    Have just received the following email from Amazon. I believe this can help others.

    We have updated how the VAT calculation service treats seller fulfilled export orders from the UK to the EU27 countries based on your feedback.

    Historically the service excluded VAT for these seller fulfilled export orders, charging VAT exclusive prices to customers and making VAT exclusive proceeds available to you. From January 27, 2021, onwards the VAT calculation service will charge VAT inclusive prices (e.g. your list price) for seller fulfilled export orders shipped from the UK to the EU27 countries (e.g. from the UK to Germany)*.

    We have implemented this change as the amount of seller fulfilled export orders from the UK has significantly increased due to Brexit. Charging VAT inclusive will help you manage the payment of taxes and duties on time in compliance with Amazon’s policy.

    We also want to inform you that Amazon will pro-actively provide a one-off reimbursement of the difference between VAT inclusive and exclusive prices for your self-fulfilled export orders from the UK to the EU with shipment date between January 1, 2021 and January 27, 2021. The reimbursement will not apply to orders with consignment value below 22 euros, since import VAT does not apply for these orders. The reimbursement will be processed by end of Q1, 2021 as a credit to your Seller account.

    We remind you that all seller fulfilled export orders from the UK to the EU27 countries greater than 22 euros should be shipped duties and taxes paid, while orders below 22 euros still benefit from tax exemptions until July 1, 2021, and can therefore be shipped without duty or VAT. For more details on seller fulfilled shipping policy, see https://sellercentral.amazon.co.uk/gc/sell-online/brexit?ref_=brexfhp.
     
    Posted: Feb 16, 2021 By: enjoylife Member since: Apr 7, 2011
    #26
  7. enjoylife

    enjoylife UKBF Regular Free Member

    145 5
    From above email, my understanding is Amazon will take the price lised on France website as the incl VAT price. however the invoice of a France order still shows the VAT is zero. Very confused.
     
    Posted: Feb 16, 2021 By: enjoylife Member since: Apr 7, 2011
    #27
  8. apricot

    apricot UKBF Regular Free Member

    423 41
    I registered for Amazon VAT services 2 years ago and they were partnered with a company called 'Avalara'. I have never seen a company full of 'Idiots' in my life. They were absolutely useless, does not have any idea what they are doing, all the calculation they made was wrong, the submissions were wrong... I cancelled my contract after a few months and I told them to stay away from my business but every 6 months somehow they took over the control of my VAT submission and attempted t make the submission on my behalf even though I cancelled the contract. They said I cancelled the contract with Amazon VAT services, not with them and I don't have any way to cancel the contract with them as I am part of Amazon. Nonsense!

    I had to pay a penalty fee to France VAT twice because of these idiots. It has been two years and I still get a one of their idiot calling me asking to send them some more documents to register me for another countries VAT that I didn't even apply for!
    Amazon has now partnered with Avask and according to their promotion etc, they would like to get in you into their nest and screw you later. I would do my best to stay away as long as I can but I have a feeling in a few years down the line, they will find a way to make sure all sellers will end up registering their VAT system...according to today's announcement, they already pushing all sellers to register with their VAT system!

    I believe Amazon VAT is one of Amazon's failure product! They will say they collect VATs and pay it, I don't think they'll collect and pay! As a business, we will suffer from their mistake.
     
    Posted: Feb 16, 2021 By: apricot Member since: Apr 7, 2012
    #28
  9. Mister B

    Mister B UKBF Ace Free Member

    2,477 576
    I was in that webinar too and it was the biggest waste of time ever. The first half was more about plugging the services of Avast, and the second half was full of contradictory information.

    Instead of having just the accountants in, they should have asked a reputable freight forwarder to attend as well.

    Nobody seems to have a clue as to what is happening, which, bearing in mind the size of the Amazon operation, is absolutely shocking.
     
    Posted: Feb 17, 2021 By: Mister B Member since: Aug 31, 2007
    #29
  10. Pish_Pash

    Pish_Pash UKBF Ace Free Member

    2,513 649
    the one thing that was a shocker was when someone fielded the question..

    Q: "what happens after the free 1-year subscription with Avalara"

    A: "if you don't continue your subscription they will deregister your VAT ID"

    It was worth attending for that nugget alone.
     
    Posted: Feb 19, 2021 By: Pish_Pash Member since: Feb 1, 2013
    #30
  11. enjoylife

    enjoylife UKBF Regular Free Member

    145 5
    Have to close Amazon EU webpages until I know what we should do. We have manya return requests from Feb.
     
    Posted: Feb 25, 2021 By: enjoylife Member since: Apr 7, 2011
    #31