If you are selling your goods on Amazon EU or just planning to do that and using their Fulfillment by Amazon (FBA) warehouse, you need to consider the following points.
NB! This article is about trading on behalf of an Estonian legal person.
What is FBA?
Fulfillment by Amazon (FBA) is an Amazon service that allows companies to outsource order fulfilment to Amazon. Companies send goods to Amazon's fulfillment centre, and when a customer makes a purchase, Amazon collects, packages and ships the order. Amazon can also provide a customer service and handle returns for these orders.
What should an Amazon trader do with VAT?
To meet all the requirements of EU VAT legislation, you need to do the following steps:
- You should obtain a VAT number for your company. How to do this can be found here. You can read about VAT here.
- You need to get an OSS special taxation number in Estonia. You can read about OSS here.
- You will need a VAT number in the EU country, where Amazon's warehouse is located and where the goods will be shipped from. As Amazon makes its own decisions which warehouses receive your goods and redirects them between their warehouses and countries, it is likely that you will need to get a VAT number not only in one EU country, but also in several countries where Amazon has warehouses. You can get VAT numbers for your Estonian company in other EU countries and file taxes in those countries either directly from Amazon or from a service provider (hellotax, taxdoo, simlyvat and other similar services). If you only trade on Amazon, in our mind, it is better to buy these services directly from Amazon.
Why do I need VAT numbers in other EU countries?
If you trade remotely, which includes trading on Amazon, and your goods are located in one EU country and you sell these goods to a buyer from the same country, you have the obligation to obtain a VAT number in that country and file VAT returns there.
Is it possible to avoid VAT registration in other countries?
This can be avoided if your annual EU sales are less than €10,000. Just in case, please note that you need to pay close attention to exceeding this threshold by yourself. Accountants usually do not provide such analyses.
What does an accountant need from an Amazon seller?
To keep correct accounting and tax records for your company, your accountant needs the following reports every month:
- Date Range Report (both Summary and Transaction and per Amazon account). Information on how to obtain this report can be found here.
- Amazon VAT Transactions Report (in .csv format). Information about how to obtain this report can be found here.
- All monthly invoices from Tax Document Library (in .pdf format). Information on how to retrieve this report can be found here.
All these reports and invoices need to be uploaded every month to Nola Accounting.