Detailed explanation of Amazon European VAT tax compliance and self-shipping policies

One of the challenges faced by sellers operating on Amazon’s European site is how to understand and comply with VAT (value-added tax) regulations. Whether you are self-shipping or selling goods through FBA (Fulfillment by Amazon), understanding and meeting the corresponding VAT requirements is the key to ensuring compliance.

Amazon Europe VAT tax overview

VAT, or Value Added Tax, is a tax levied on the value-added part in all aspects of commodity production and circulation. For sellers on Amazon Europe, VAT compliance not only involves tax calculations, but also includes a series of possible fees.

Import VAT and sales VAT

• Import VAT: The calculation formula is (declared value + first-trip freight + import tariff) × 20%.
• Sales VAT: Calculated based on market sales price, the specific formula is market sales price / 6.

Registration fees and other expenses

In addition to tax calculation, VAT registration will also involve many potential expenses such as registration fees, consulting fees, translation fees and tax service fees.

VAT requirements under self-shipping policy

For sellers who choose the self-shipping model, although they do not need to use local warehouses in Europe, they still need to register for VAT and pay tax on time under certain circumstances. Understanding the specific VAT requirements for self-shipping on Amazon Europe is crucial to ensuring business compliance.

Compliance Measures

• Register for VAT: Complete the registration according to the VAT threshold and procedures of the target country.
• Maintain Records: Save all sales-related documents for tax review.
• Use tool assistance: Use VAT calculation tools and management tools provided by Amazon to simplify the process.

The difference between the Pan-European Plan and the EFN

In addition to self-delivery, Amazon also provides two logistics solutions: Pan-European and European Fulfillment Network (EFN). Both methods have their own characteristics, and sellers need to choose the most appropriate solution according to their own circumstances:

• Pan-European Plan: Allows goods to be placed in warehouses in multiple European countries to facilitate quick delivery, but requires registration of VAT tax numbers in multiple countries.
• EFN: Only goods need to be stored in one country and distributed to other markets through cross-border logistics, reducing the complexity of VAT registration.

Importance of complying with tax regulations

In recent years, a series of VAT-related incidents have occurred on Amazon’s European site, emphasizing the importance of compliance operations. Sellers should pay attention to tax compliance and ensure business legitimacy by strengthening internal controls and seeking professional consultation.

Conclusion

Regardless of the logistics method used, understanding and complying with VAT regulations is essential when operating a business on Amazon Europe. By registering for VAT, maintaining good records, using convenient tools, and seeking professional advice in a timely manner, sellers can effectively manage tax affairs and promote healthy business development.