VAT rules for Amazon FBA sellers

[sglobal]

I've searched this question quite a bit but haven't found any proper answer so I hope someone would be able to help me out. I'm a director for a LTD company which sellers across Europe using Amazon FBA. As we're registered for Amazon Pan Europe service, Amazon keeps our stocks in every country they've their presence.
Let's assume our annual sales in UK, Germany, France, Spain and Italy is £20k each. So we sell £20k worth of products on each of these Amazon sites. Our annual sales have now exceeded UK VAT threshold. Does that mean we've to register for VAT OR HMRC would only look at our UK sales?
I'm not sure if its relevant information, all sales proceeds from Amazon are paid into our UK bank account.

 

[Pish_Pash]

Actually, once you allow Amazon to start storing your stock in all the EU fulfilment centres, you immediately become liable for paying VAT to the authorities in that country (there is no threshold). I think it's 7 countries you need to register & submit VAT returns in. (Poland & the czech republic don't have Amazon marketplaces, but Amazon have fulflment centres there so they store stock in those countries, meaning you have to register there too)

Amazon are very keen to get people to sign up...but they are totally derelict at underlining what the MASSIVE ramifications are.

 

[Mr D]

Agree with Pish_Pash, you have no threshold in any foreign country where you store stock. Immediate VAT registration then regular filing in each of those countries.
For smaller seller the Pan-EU fulfilment system is a major cost in time and money.
Filing in 7 foreign languages. And at least one (Germany) the filing is monthly last I looked.

Don't forget penalties by not registering immediately your stock was stored in each country.

 

[sglobal]

Thanks Pish_Pash and Mr D. I'm really worried now.
Do you guys have any links to a credible source which I could read to get better understanding of all this? I can't believe when Amazon rep contacted me to sign up for PAN European service they didn't even mention the VAT side of things.
Basically what you guys are saying is we're liable for VAT charges for every single sale that takes place outside UK (in other European countries where we've stock)?

 

[Mr D]

Thanks Pish_Pash and Mr D. I'm really worried now.
Do you guys have any links to a credible source which I could read to get better understanding of all this? I can't believe when Amazon rep contacted me to sign up for PAN European service they didn't even mention the VAT side of things.
Basically what you guys are saying is we're liable for VAT charges for every single sale that takes place outside UK (in other European countries where we've stock)?

Yes they wouldn't mention the tax side of things because its your responsibility not theirs. You don't pay them for tax advice.

http://www.internetbizuni.com/blog/pan-european-fba-vat
https://www.webretailer.com/lean-commerce/selling-amazon-europe-vat/#/

 

[sglobal]

Thanks Mr D.
I totally agree its not Amazon's responsibility but it'll be nice if they could just give a heads up so companies would know exactly what to do before they enrol into it.

 

[Mr D]

Thanks Mr D.
I totally agree its not Amazon's responsibility but it'll be nice if they could just give a heads up so companies would know exactly what to do before they enrol into it.

That .... would open them to liability they don't currently have.

 

[Pish_Pash]

Basically what you guys are saying is we're liable for VAT charges for every single sale that takes place outside UK (in other European countries where we've stock)?

Yes, that's right.

Personally in your shoes, I'd cancel pan-european & retrieve my stock (very quickly) back to the UK - fyi there are 3rd party companies that offer to handle the EU VAT for you (register you for VAT in all 7 countries & submit VAT returns for you), but reading the Amazon forums, they are very expensive....but worse, they suck at actually doing this service! (which doesn't surprise me at all...it's just way too complicated - for example to register for VAT in Spain you needto use a notary & have translated documents for the notary - that's not included in the price....blah blah). For the really big boys only.

 

[Iain_Henderson]

Here's the help page from Amazon which contains further links:

https://sellercentral.amazon.co.uk/...1860230&ref_=ag_G201860230_h_r0_cont_sgsearch

I'd second the advice of pish_pash..

 

[sglobal]

Thank you everyone for this wonderful advise so far.
I'm seriously considering of cancelling pan-european service ASAP but before I do that I need some clarification.
If we keep all our stock in Amazon UK warehouses, then how do the VAT rules apply in UK and in other EU countries? Do these thresholds apply then?

https://www.vatlive.com/eu-vat-rule...errer=www.vatlive.com&sessionId=1526283794087

 

[lesvatadvice]

I agree with the above comments. Your presence in FBA triggers a liability to register for VAT. You might speak with VATGlobal, as they are one of the specialist firms in this area.

 

[Mr D]

Thank you everyone for this wonderful advise so far.
I'm seriously considering of cancelling pan-european service ASAP but before I do that I need some clarification.
If we keep all our stock in Amazon UK warehouses, then how do the VAT rules apply in UK and in other EU countries? Do these thresholds apply then?

https://www.vatlive.com/eu-vat-rules/eu-vat-number-registration/vat-registration-threshold/?referrer=http://www.internetbizuni.com/blog/pan-european-fba-vat&lastReferrer=www.vatlive.com&sessionId=1526283794087

Yes the thresholds apply when you don't store stock overseas. So selling £20k sales into France from your UK stock would mean you don't need to be VAT registered.
And as you may already have noticed the extra fees amazon charge for sending stock from UK to French (and other) customers tends to be below what it would cost you to send to the same address.

 

[Pish_Pash]

If we keep all our stock in Amazon UK warehouses, then how do the VAT rules apply in UK and in other EU countries? Do these thresholds apply then?

If you are based in the UK, then the usual UK VAT threshold applies ...same with fulfilling from the UK to the EU...distance selling VAT threshold applies.

 

[sglobal]

Thanks a lot Pish_Pash. You've been very helpful!