VAT rules to blame for destruction of returned stock, say Amazon France

Amazon France are blaming the French VAT regulations for forcing them to destroy returned stock after the marketplace came under fire for getting rid of unsold products in massive quantities.

Last week, Amazon was reported to have destroyed €293k (£259k) worth of unsold stock over nine months in one their smallest French distribution centres. This means that across France 3m products are being scrapped.

As a result, the French Secretary of State for the ecological transition Brown Poirson vowed to soon prohibit this type of practice so that businesses like Amazon will no longer be able to discard products that are still consumable.

The marketplace have addressed the criticism that followed in the wake of the news. In a series of tweets, Amazon hit back, saying that donating old stock is not economically viable” as the Frech government has VAT obligations on sellers.

“Regarding the donations of third-party sellers from the marketplace, the current VAT regulations impose that sellers pay VAT on donations, which is not economically viable. We strive to reduce the number of products for which we have no choice but to destroy, in particular by bringing the subject to the competent authorities. ”
-Amazon

However, Amazon pointed out that they have no choice “but to destroy” merchants’ unsold products in a case when a seller orders them to do so. The contractual agreement between both parties says that unsold goods either have to be destroyed by Amazon or taken back by a seller. If a merchant creates a removal order asking Amazon to scrap the products, the marketplace is legally bound to take action. The lack of space to keep old stock also adds to the equation, leaving merchants to choose a simpler and cheaper option for the stock to be destroyed.