Amazon is making it easier for UK sellers to plug in to their EU FBA (Fulfilment by Amazon) network.
You can now send your wares into an EU generic warehouse and Amazon will do the rest.
As they say of the new Pan-EU system: “Fulfilment by Amazon (FBA)’s suite of solutions can help you grow your business in your home marketplace and abroad. Now Pan-European FBA enables you to sell across Europe by helping you place inventory closer to your customers in Europe, and fulfilling and delivering orders fast at lower costs. Selling with Pan-European FBA makes your products eligible for Prime and visible to millions of customers across Amazon’s European marketplaces.”
To find out more check out the page on Amazon here.
The five connected EU markets they have in mind are the UK, Germany, France, Italy and Spain.
As one Amazon seller correspondent who has been in touch regarding this says: “What about tax and VAT? Amazon make it sound very easy but I suspect that many sellers aren’t paying their way. Can Tamebay shed any light on that?”
And the simple answer is no: we can’t but we’re sure that many other sellers are interested in that question. How is Amazon compelling sellers to pay their tax?
But equally, this is a leap forward for EU sellers and a convenient opportunity for selling more. Will you be taking advantage?
17 Responses
The vat is a very good point. People need to remember that any country their stock is stored in (in Europe) will mean they need to register for VAt As thresholds disapear then. Amazon will not restrict which country they store your stock in – we are reg in Germany & France – but not Spain / Italy – using this service we could find Ourselves registering there. – which is another admin headache.
Also not everyone will remember that threshold for France dropped right down to 35k Euros this year , even without this.
They will move stock to Czech Republic and Poland too so will mean sellers need to register there too
This is a VAT ball ache, plain and simple. Unless you have considerable sales/margins, it’s not worth it.
Accounting nightmare as we currently know our stock is in the UK and we just need to see if we are registered in the destination country. Keeping track of where your stock is held and the destination country sounds grim.
Using the rate card of one of Amazons recommended accounting partners I estimate year 1 costs to be £25k approx including registrations in all countries. That is before you consider the admin involved in preparing the data to be submitted. Not viable for many businesses I would say (If doing everything correctly)
I guess most of us will leave this to the Hong Kong and Chinese sellers.
Amazon could make this so easy by becoming the merchant of record and allowing FBA UK sellers to have title change to Amazon in the UK and then let Amazon manage the title change in the country their customer is shipping to. There would be no tax nexus issues for the seller and the tax authorities in each country would deal with Amazon, rather than thousands of smaller sellers.
Hi
Can someone tell me the reason why we are in the EU, I thought it was meant to be a free trading area.
Are the Eurocrats jealous of the success of the British e-Commerce industry, with this, VATMoss – I wonder what they are dreaming up next for us!!
I was quoted £3,000 per country, so we have pulled all our FBA stock back from European FBA warehouses. If they want to buy my products they can buy through Amazon.co.uk, and then do not have to offer Free Returns and VAT registration. Especially with the shocking figures given at Catalyst this year that 50% of all items sold in Germany are returned to the seller.
Well, correct me if I’m wrong but free trade means all sellers in a given area are treated equally with no favouritism. This means no restrictions on exports and no extra tariffs for importers so you can “sell as the locals do”. It’s a mechanism that works well, allowing us to easily sell overseas. Of course, it doesn’t mean that other nefarious forces (Amazon, eBay etc.) will still try and shill us for all we’ve got. But then again that’s the nature of competition.
As for reasons why we’re in the EU, considering we differ clearly on our perspective it’s not even worth bringing up.
The Free trade within the EU argument is a Red Herring, we are a UK based VAT registered company so all Vat collected by me on all orders within the EU are accounted for and passed on to HMRC.
The cost of me registering for VAT with HMRC is negligible (Time and the cost of a stamp)
If we were to put stock into FBA warehouses in the EU, under the rules we would need to register in those countries and the VAT (at that countries rates, but for simplicity we will assume that all countries have the same VAT rate) would need to be passed onto that countries equivalent HMRC instead, so in theory, we pass on no more VAT than we did before as the UK VAT bill will be reduced by the same amount that we pass to the other HMRC.
Where the costs come into it is that it does not seem easy for us to register for VAT in the other countries and we seek the help of specialist company’s, some of which have been mentioned already.
Having looked into this, if we were to register for VAT in these different countries, i will pay more to these accounting companies for VAT, than i do for my accountant who looks after my Ltd Company accounts, so in my view is not proportionate.
The problem at the moment, is the lack of competition in this area, which if there were more companies doing this then the costs would probably come down.
It may also be down to knowledge, (or lack of), accounting wise, i could work out what goes where, its the registering for each country that proves the difficult bit as well as the rules that you have to follow to register for VAT in different countries.
My simplistic look of this subject is, if a country wants me to register for VAT to pass on the relevant taxes to them, then make it plain and simple for me to do so.
Seeing as its only an extra 1-2 day shipping time from the UK to the target european countries its really not worth the hassle of registering in each country unless your sales are going to be in the high figures, if this is the case though I would have to research if FBA is the best solution.
Whilst a European FBA sounds good in terms of market access and fulfilment, it also means different tax arrangements for each member state.
Perhaps Amazon may introduce a system to collect a single EU Tax from sellers to pass unto EU member states?
This looked so amazing when I first heard about this, but IT IS NOT FINANCIALLY VIABLE. It is simply way, way, way too expensive for 90% of FBA sellers to register for all 5 EU countries,(plus one or to others)…plus pay for * 5 VAT returns every month/quarter. Plus the total ball ache and nightmare of dealing with with another firm of of accountants. I have been running my own business (recruitment) for 10 years, now I have an Amazon business. Let me tell you VAT is the the No 1 pain in the back side, time consuming, lose the the will to live ritual that i had to go through every 1/4. There is no way I would consider this for 5 + counties. Also don’t forget some of these counties require you to submit monthly….yes monthly VAT returns. ..oh and there is the Intrastat to think about,. If you are not registered be prepared to get a very large fine and or prosecution from said EU tax bodies. Apparently Italy is particularity proactive. These guys will hand out big fines and back date the VAT you owe….the whole thing sends shivers down my spine.
Great idea Amazon but your product people have not done their homework.
There just isn’t enough upside to the extreme pain, time and cost implications.
All that will happen is the Chinese will say thanks for very much and take full advantage….
Nice.
GS