Amazon sellers: are you aware of your tax reporting requirements?

In recent months we’ve been getting a lot of queries from Amazon sellers about their tax affairs.

Amazon makes it very easy for business sellers to send, store and sell their products abroad, which opens them up to a number of additional tax and reporting burdens, which many are unprepared for. This means that unfortunately we see a lot of people getting it wrong.

Fulfilment

For example, Amazon’s ‘Pan-European FBA’ (Fulfilment by Amazon) service lets you store your products in Amazon’s various EU warehouses, and easily sell in all 5 EU marketplaces (UK, France, Germany, Italy, Spain). The catch is that you need to register for VAT in all of these countries, as well as Poland and the Czech Republic, as there are warehouses there as well. The distance selling thresholds do not apply in these circumstances, as the products are stored abroad, and moved around as Amazon sees fit. 

Third Party Sellers

Amazon are required by law to send details of their third-party sellers on to the various tax authorities within the EU, so it is only a matter of time before this becomes a problem for any sellers who are not complying with their obligations. 

Anyone using the Pan-EU FBA service who is not already on top of their affairs may need to get in touch with one of the various European VAT specialists, or otherwise ensure that they are using Amazon’s own tax calculation service.

When it comes to recording transactions and calculating VAT, Xero combined with our in-house built Weava add-on, can be a solution.

If you need any further advice, please get in touch with a member of our Tax team on 01903 234094.