Do Amazon sellers need to apply for a VAT number? If they don’t, will there be problems in the future?
According to relevant EU laws, all goods that have been sold in the EU, even if they use local third-party logistics and warehousing services, must pay value-added tax in accordance with the law. Because the products are shipped from the local area and the transaction is completed, strictly speaking, it is illegal to do cross-border e-commerce in the EU without a VAT number! And from the perspective of Amazon account security, Amazon sellers must apply for a VAT number.
In the current situation where things are still unclear, if sellers must take the risk of not applying for it for the time being, they can only continue to follow the current conventional practice, that is, using the freight forwarding company’s VAT number for customs clearance and tax deduction. But there are obviously great risks. It violates local tax laws. Once the customs is on the lookout, there are sales records on Amazon, but at the same time the tax collector is not the seller himself, and there is no record of tax payment, the seller can only pay taxes at 20% of the sales amount in one lump sum!
Besides, even if the tax bureau and customs do not suspect the seller, once the tax bureau puts pressure on Amazon, Amazon can only take measures against the seller, such as removing products from the shelves, or more seriously, closing the store. In addition, even if the tax bureau does not investigate, since the VAT tax number provided in the Amazon backend is the freight forwarder’s, this VAT tax number may be used by multiple sellers at the same time, then the possibility of association is naturally greater, and there is also the risk of account closure.
In general, cross-border e-commerce cannot be done in a muddle-headed way. You must know how to reduce risks and formalize as much as possible if you can.