You are an e-merchant and have chosen to use the pan-European “Fullfilled by Amazon” (FBA) program. This program is logistically and commercially powerful, but it creates Intra-Community VAT obligations that can be pretty complex. How can you ensure your VAT compliance without taking risks?
Choose Amazon FBA PAN-EU: the most powerful and demanding program
E-retailers who wish to sell their products via the Amazon marketplace within the European Union have the choice of several logistics distribution schemes,
with different VAT implications.
- The EFN (European Fulfillment Network) program is the preferred scheme for e-tailers who are just starting out. The idea is to store your products in one country (usually your country of residence) and then ship them to other countries via the European distribution network. Advantage: you do not need to register for VAT in another country. Disadvantage: long delivery times that hamper sales opportunities.
- The MCI (Multi-Country Inventory) program allows you to store your products in several Central European countries for distribution to all European markets. It allows you to try to open up new markets before switching to FBA, but has some disadvantages in terms of VAT management and optimizing logistics costs.
- The “Fulfilled by Amazon” (FBA) program relies on the use of Amazon warehouses throughout the European Union. By storing good in several countries, the marketplace allows e-sellers to quickly
deliver their products throughout Europe and reduce shipping costs. The FBA program is therefore the most powerful program in terms of logistics, and it is the one that Amazon pushes e-retailers towards. This program requires a good command of VAT regulations and a dedicated service provider.
What are the VAT obligations related to the Amazon FBA program ?
E-traders are subject to several VAT obligations:
Stocks abroad and VAT numbers
Stocks and VAT returns
Declare your remote sales:
- Intra-Community distance selling from the country of residence
- Intra-Community distance selling from stock held in another country, in particular via the FBA program.
Declare certain operations in the countries where the goods are stored:
- Transfers of stock assimilated to Intra-Community acquisitions
- Stock transfers treated as Intra-Community deliveries
- Domestic sales to individuals.
Stocks and INTRASTAT
For stock transfers assimlated to Intra-community aquisitions and/or deliveries, e-sellers must file EC Sales Lists from the 1st euro dispatched and INTRASTAT declarations once they pass the INTRASTAT thresholds for introduction and/or shipping.
For Intra-EU distance selling: e-merchants may have to file INTRASTAT declarations at introduction/shippping in the country of departure/arrival when they exceed the INTRASTAT thresholds at entry and/or upon shipping.
What are the storage countries for the FBA program?
Amazon offers to store the goods of e-retailers who subscribe to the pan-European AMAZON FBA program in several countries: France, Italy, Spain, Germany, Netherlands and Sweden.
Recently Amazon has extended its distribution network and now you can also use distribution centres in Poland, Slovakia and the Czech Republic.
Faced with the complexity of Intra-Community VAT obligations, e-merchants, without a dedicated and competent contact person, may find themselves at a loss to manage specific and risky situations.
- Different rules, from one country to another, for B2B and B2C sales from an Amazon warehouse in the country of storage on the one hand, to another member state on the other.
- Managing stock transfers between Amazon warehouses: Amazon is free to move seller’s inventory from one member state to another without notifying the seller. These inventory transfers, which appear in Amazon sales records, are difficult to analyze and isolate. However, these transfers lead to an obligation to register for VAT in the country of storage of departure and arrival of the goods. In the country of departure, the stock transfer must be declared as an Intra-Community delivery. In addition, INTRASTAT declarations must be filed in the country of departure/arrival when a certain threshold is crossed.
- Returns of goods: customer returns may require reporting on the INTRASTAT introduction/shipping of vendors.
- Other Flows: some sellers may have other transactions besides Amazon sales in the inventory states, requiring regulatory analysis.
- Frequent regulatory changes in the field of intra-community VAT.
E-merchants risk errors, penalties and sanctions. And no one wants to be confronted with the tax authorities in the context of an audit, least of all from a foreign country!
Appointing a fiscal agent – a strategic and secure choice for e-merchants
European e-merchants who subscribe to the pan-European AMAZON FBA program can choose to appoint a fiscal agent.
In addition to the basic services, EASYTAX offers a complete service so you can easily and securely manage your tax and declaration obligations:
- Preliminary analysis of records – transactions, invoices and related obligations to map the specific flows made by the vendor;
- Obtaining the VAT number in the country where the goods are stored;
- Filing VAT returns;
- Filing EC Sales List / INTRASTAT;
- VAT recovery;
- Managingadministrative contacts in the event of a tax audit;
- Regulatory monitoring in each of the countries concerned by your operations.
Don’t be left wondering what to do alone! At EASYTAX, you have a dedicated contact person who knows your file, supports you day-to-day and takes care of all your VAT obligations for your operations in Europe. Choose simplicity and security: contact us.