If you are thinking of selling via Amazon’s new Pan EU FBA service then VAT is one of the first things you need to consider. Today Alex Wyatt from SimplyVAT summarises the things you’ll need to consider:
Pan EU FBA
Sellers are finding Amazon’s Pan-European programme FBA an appealing way to expand their business throughout Europe. With low fulfilment costs, access to Prime customers and Amazon controlling stock location, it seems like an unmissable opportunity.
EU VAT Obligations
The Pan-European program places stock amongst 7 countries: Germany, France, Italy, Spain, the UK, Poland and the Czech Republic. When you put your stock in any Amazon warehouse in the EU for onward sale to private consumers, it creates a taxable supply. This triggers a VAT registration in that EU country. In addition to the 7 VAT registrations, there are approximately 61 VAT returns filed annually between the 7 Pan-EU fulfilment locations.
Other obligatory compliance reporting called EC Sales Lists document the stock transferred or sold between EU Countries. For example, if stock were to move from UK warehouse to a French warehouse, this must be reported on a UK EC Sales lists and the French VAT return.
For sellers based outside of the EU, some EU countries require fiscal representation, namely France, Italy, Spain, and Poland. The fiscal representative is jointly and severally liable for the VAT owed by the seller therefore bank guarantees and extra fees may occur.
Ignorance of the VAT rules is not an excuse for non-compliance and can result in penalties of up to 120%.
Don’t let VAT be a barrier for your European expansion plans.
For further information about your VAT obligations across Europe, please contact me at [email protected] or go to simplyvat.com and our team will be happy to discuss your individual business needs.
SimplyVAT also have a Free Essential Guide for E-commerce and European VAT guide with more information!
