What is Amazon Europe VAT? In what situations do you need to register?

Nowadays, when doing cross-border e-commerce, you not only need to understand the platform you are on, but also some tax policies facing the market. For example, if you open a store on Amazon Europe, you may be exposed to VAT. Many people don’t know what VAT means on Amazon Europe. Let me introduce it below.

What is Amazon Europe VAT?

Amazon's European VAT is equivalent to my country's VAT. The VAT rate in each country is different. The lowest tax rate is in Germany, which is only 19%, and the highest tax rate is in Poland, which is 23%. Even the tax rate declaration cycle is different in each country. Germany's VAT is declared once a month, and the report needs to be completed on the 10th, while the UK's VAT needs to be declared once every three months.

In what situations does Amazon need to register VAT?

1. Sellers from EU member states with annual sales exceeding 81,000.

2. Sellers from non-EU member states and Chinese sellers using EU warehouses must register for VAT and pay it as required. (Even if the overseas warehousing service you use is provided by a third-party logistics company and you have never opened an office in an EU country or hired local employees, you still need to pay VAT.)

3. Direct mail sellers from China with cumulative sales exceeding £70,000 in 12 months are required to register for VAT and declare and pay sales tax in accordance with regulations.

Consequences of not registering for VAT:

1. Export goods cannot enjoy import VAT refund.

2. The goods may be detained and unable to clear customs.

3. Failure to provide valid VAT invoices reduces the turnover rate and preferential rate of overseas customers.

4. Normal sales on the e-commerce platform cannot be guaranteed.

The VAT on Amazon Europe is actually a kind of consumption tax, or more professionally known as the EU Value Added Tax. Most European imported goods are subject to VAT, so you cannot avoid this tax when doing business in this market, and you also have to learn how to calculate VAT.

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