If you want to tap the EU market as an Amazon seller, you’ll need to deal with VAT.
In the US, the equivalent to the EU VAT is the sales tax. However, there are some differences.
- VAT is paid when you import so you need to have the proper VAT registration for that country and pay the proper amount
Some sellers pay the whole amount upon import of the products, and it may be a considerable amount. But this can be offset when the items are paid.
- Your sales price should be inclusive of VAT
In the US, you pay the tax when you reach the till (cashier). However, in the EU, the sales price already contains VAT upfront so there are no surprises when checking out. Since the VAT rate is different for every EU country, your product will have different prices, too.
Therefore, VAT registration and compliance is a must if you plan to expand to the EU market. To understand more about VAT registration, click here. [hyperlink to VAT registration article]
- VAT is payable where you have inventory
If you opted for Amazon’s pan-European programme, your products are warehoused in several different EU countries. Therefore, you need to be registered where these fulfilment centres are.
VAT Registration & Compliance for E-commerce Sellers
How Can I Register for EU VAT?
There are consequences for not registering and complying with EU VAT. One of them is the suspension of your account, and you definitely don’t want that.
You can study VAT requirements, register online, and do the paperwork yourself. But with the complicated regulations and the coming changes to these rules this year (2021), going into the nitty-gritty of EU VAT will take up too much of your time—time you need to run your business successfully. In fact, you can ask any expert and they won’t even recommend you hire your US tax accountants for this job. EU VAT is that different.
The best recourse is to hire an EU VAT professional who:
- has vast experience in serving Amazon sellers from all over the world;
- offers complete EU VAT compliance from registration to regular filing of returns;
- is knowledgeable in each European country’s differing VAT regulations;
- has local affiliates in each FBA country in Europe to help you comply with all your VAT requirements;
- won’t ask for payment until you hit it big;
- are friendly, thorough, and would provide you helpful advice regarding taxes as an Amazon seller.
Clearly, Munshian Ltd is who you need. We are here to provide you with complete tax services so you’ll become a successful Amazon seller in the EU. We also offer helpful advice to if you need guidance on your Amazon EU strategies.
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For more information on EU VAT basics, click here. [link to VAT article basics]
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