Does Amazon Europe require VAT? Is VAT necessary?

Amazon VAT is a post-sales value-added tax commonly used in EU countries, which refers to the profit tax on the sales price of goods. For example, if you use local warehouses in the UK for delivery, you need to pay UK VAT. Does Amazon Europe require VAT?

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1. Is VAT required for Amazon Europe?

Self-delivery accounts do not need to register VAT, but if you have already registered VAT, then no matter whether you have sales or not, whether you are self-delivering or FBA, you need to declare it on time. If the seller does not declare, the tax bureau will estimate the tax amount for the seller. Sellers who want to develop in the European market must follow the tax bureau's requirements in terms of taxation, and the tax bureau's management will only become more and more strict.

If the seller does not want to give up the account, they must first deal with the tax issue if the tax bureau has already notified them to pay the back taxes. And if the seller does not respond to the email within the time specified by the tax bureau, the tax bureau will notify Amazon to close its account.

2. Under what circumstances do you need to register for VAT?

1) Shipment from outside the EU to warehousing within the EU.

2) B2C distance sales within the EU break the tax threshold in the destination country.

3) Distribution of goods between warehouses in different countries within the EU.

4) Import goods into the EU.

5) Selling goods to EU business sellers.

Anyone who meets any of the above five conditions shall register for VAT.

Once sales exceed the distance selling threshold in an EU country, sellers are obliged to register for VAT in that country.

3. Types of taxes and calculation formulas for cross-border sellers:

①Tariff (DUTY) = declared value * product tax rate (different products are calculated according to different tax rates)

② Import VAT (MPORTVAT) = (declared value + first-leg freight + DUTY) * VAT rate

③ Sales VAT = sales price / (1 + tax rate) * tax rate

The VAT actually paid by sellers = sales VAT - import VAT - other deductible amounts.

For example:

For example, if the product on the German platform is sold for 20 euros and 100 units are sold, the German tax rate is 19%.

The sales VAT payable by the seller is 2000 divided by (1+19%) multiplied by 19% which equals 319.33

The above is the VAT tax calculation formula.

In summary, Amazon Europe requires VAT. Amazon sellers need to register tax numbers in five countries to operate their stores normally.