VAT being charged on zero rated goods
We sell childrens clothing which is zero rated in the UK and as such our price does not include any element of VAT. Since we moved to FBA Amazon have been selling our products in to the Republic of Ireland, where childens clothing has a VAT rate of 23%. On these sales Amazon is deducting 23% from our sale price for VAT, leaving me with a loss on that sale. I would have thought that they would add the VAT on to our price as it is zero rated, rather than deduct it from the zero VAT price. Have tried seller support but not getting anywhere with that.
Is anyone else having the same problem or has a suggestion how to fix the problem? Apparently Amazon include the Republic of Ireland in the UK marketplace so there is no option to provide a different price for that marketplace, like you can do with other European countries.
Thanks
5 replies
Seller_76AUwmqvSyRIM
Amazon is making a mess of vat transactions. You really do think that as one of the biggest retailers, they should know.
I've had to take them to court three times to recover vat that was wrongly deducted from my revenue.
If you ARE NOT vat registered, I believe that there isn't a lot you can do other than stop sales to Ireland. The Amazon system can't cope with non-registered sellers.
If you ARE vat registered and if you have set the vat rate on your items correctly, then they should not be deducting vat before setting a price for Irish sales.
You need to contact seller support and tell them they have made a mistake and ask for reimbursement. Be warned, be prepared for a long struggle each and every time you contact them as they will insist that they are doing it right.
Perseverance is key and ultimately, Small Claims Court if necessary. I always take that final option out of principle, whatever the amount is.
Seller_d8YGbIjNqwFxn
Have you got your Product Tax Code set correctly against the SKU. It should be set to A_CLTH_CHILD for things to work correctly.
There are differences though in the age ranges that are Zero Rated in Ireland though. It only applies to clothes under 11 years old. If it is older clothing and not Zero Rated in Ireland then Amazon should be adding 23% to your price as long as your Product Tax Code is set to A_CLTH_CHILD
