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This article applies to selling in: United Kingdom

Frequently asked questions on the reversal of the reduced value added tax in Germany from 1 July 2020 to 31 December 2020, effective on January 1, 2021

The temporary reduction of the German value added tax (VAT) from 1 July 2020 is planned to end 31 December 2020. On 1 January 2021 the German VAT will change back to the original rates, from

  • 16% to 19% (regular VAT rate)
  • 5% to 7% (reduced VAT rate)

To comply with this effective 1 January 2021 we will revert all system changes that were implemented in course of the VAT rate reduction from 1 July 2020. Please note that the VAT increase will not be automatically applied for your prices on Amazon, since uploaded prices are gross prices (tax inclusive). To change your prices, you can use various tools in Seller Central*:

Please see below for frequently asked questions.

*Please note that for books, the Fixed Books Price (FBP) still applies.

Fees

Will the VAT charged on current fees be automatically adjusted?

In case German VAT is charged on any of your Amazon fees, the German VAT rate applied will be increased from 1 January 2021 onwards automatically and there is no action required from your side.

Current Selling on Amazon fee (referral fee) is charged on a price inclusive of VAT, will there be any change to the logic?

No, the logic for Selling on Amazon fee (referral fee) will remain the same. You will pay this fee as a percentage of your selling price inclusive of VAT.

Pricing Tools

Do I have to make changes to my Pricing Rules when using Build International Listing (BIL) after VAT rates are changed back to original (pre 1 July 2020) rate in Germany?

No. The VAT rate change in Germany will automatically be updated if you use the Build International Listings (BIL) price rule ‘Same as the source marketplace, adjust for taxes and fees.’ In addition you can manually modify prices at any time through Manage Inventory or Manage Pricing pages in Seller Central.

Will the German VAT rate change impact my prices in Automate Pricing?

No, Automate Pricing will not adjust your prices due to the the increase in VAT. Your SKUs will continue to be repriced in accordance with the parameters of the pricing rule you have configured.

Will my prices on Amazon change automatically on 1 January 2021 if I do not use Build International Listing (BIL) price rule ‘Same as the source marketplace, adjust for taxes and fees.’?

No, the VAT increase will not be automatically applied for your prices on Amazon , since uploaded prices are gross prices (tax inclusive). In case you need to adjust your prices, you can use various tools in Seller Central:

  • Use the Manage Inventory or Manage Pricing page to update prices manually.
  • In your catalogue using Inventory Files for bulk uploads.
  • If you are using an API, update prices through Feed Files or your integrator solution.

VAT Calculation Service

Will the VAT Calculation Service reflect the reversal of the temporary change in VAT rates in Germany?

Yes. Selling Partners do not have to make changes to their VAT Calculation Service settings. Amazon will update the VAT Calculation Service to reflect the VAT rate reversal (back to 19% and 7%) for Germany effective from 1 January 2021 onwards and the VAT Calculation Service will automatically use the original (pre 1 July 2020) VAT rates for sales of items for which German VAT is due.

Will the VAT Calculation Service adjust the VAT-inclusive list price to reflect the changed VAT rate?

No. Amazon’s VAT Calculation Service does not re-calculate the VAT-inclusive list price and the VAT Calculation Service methodology is not changing due to changed VAT rate. Amazon will calculate the VAT-exclusive amount from VAT-inclusive list price uploaded by Selling Partners. For more details, you can refer to the VAT Calculation Service FAQ.

How does VAT Calculation Service handle customer returns after 1 January 2021 (19% / 7% VAT) for orders placed before 1 January 2021 (16% / 5% VAT)?

All refunds will follow the VAT calculation treatment of the original sales transaction to which they relate. Therefore, if the original sale was subject to 16% VAT (respectively 5% if reduced VAT rate applies), the customer refund for a return that occurs on/after 1 January will also be subject to 16% (respectively 5% if reduced VAT rate applies).

VAT Services on Amazon

When will VAT Services on Amazon reflect the VAT rate changes in Germany, scheduled for 1 January 2021?

The VAT rate changes will be reflected in your VAT reporting from February 2021 onwards where filings from January 2021 will be processed.

Relevant links:

Manage Inventory Page

Manage Pricing Page

Inventory File Templates

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