Amazon’s European tax issues have always been a hot topic in the e-commerce industry, especially after sellers on the UK and German sites were successively deprived of their sales rights, the VAT tax issue has set off a small climax. A series of questions followed, what is Amazon VAT tax? What are the regulations and rules for VAT tax? Do Amazon sellers need to register a VAT tax number? How to declare VAT tax? Let’s share the relevant regulations on VAT tax.
First, let’s understand what VAT tax is. VAT is a tax system in the European Union. The full name is Value Added Tax, which is actually a tax levied by customs on goods, freight, insurance and other expenses. Before 2017, merchants on the Amazon platform did not need to pay VAT value-added tax, because the general import and export taxes to EU countries are mainly: import value-added tax (refundable) + import tariffs (non-refundable) + sales value-added tax (collected from the consumer side for tax refund) and do not involve VAT value-added tax. However, in 2017, the European Union sued the Amazon platform and required Amazon to pay VAT value-added tax. Therefore, starting from 2017, Amazon platform began to require merchants to register VAT numbers and pay VAT on time, otherwise the account will be blocked. Therefore, merchants who want to go online on Amazon platform in Germany, France, Italy, Spain and the UK must register VAT tax numbers. Since Amazon merchants cannot avoid VAT declaration and payment, let’s learn about VAT tax regulations. The VAT tax rate stipulated by the EU is generally around 20%, and different countries have corresponding adjustments, such as Germany 19%, France 20%, Italy 22%, the UK 20%, Belgium 21%, Sweden 25%, etc. VAT tax is mainly applied to the sale of daily necessities, such as household goods, clothing and footwear, gardening supplies, etc. Among them, franchised products enjoy preferential tax rates as low as 5%, such as heating devices, boilers, hydropower and wind power generation equipment, etc. Let’s talk about how to declare VAT tax. VAT tax is only collected when goods are sold. Amazon merchants who have registered VAT tax numbers every quarter are responsible for filling out tax forms and declaring them on the official website of the tax bureau, and paying the VAT tax collected from consumers to the General Administration of Taxation and Customs.