I am a seller based in the UK, with my company registered and operating within the UK. I am a UK citizen, and my business is declared VAT exempt by Amazon. However, I am being incorrectly charged the Marketplace Facilitator Fee on all my orders.

For all my orders, Amazon provides the following message:

Marketplace facilitator order (legislation: UK VAT on eCommerce): Amazon is collecting VAT on this transaction. This is a marketplace facilitator order, and hence VAT is being collected and remitted to the tax authorities by Amazon. Your net proceeds will not include VAT for marketplace facilitator orders. Please visit the Tax regulations help page for additional information.

I have verified that all my products are delivered within the UK, so I don't understand why VAT is being charged on these transactions. I have been charged approximately £213 in VAT on these orders, which impacts the profitability of my business.

A few days ago, Amazon sent me an email expressing doubt about whether we are based in the UK. I opened a case with them, and they requested proofs, which I submitted. After that, they sent me an email stating

Thank you for your submission. Based on a review of your account and the information provided, we have completed our verification of your establishment for Value Added Tax (VAT) purposes.

How can we make a profit on Amazon if we are paying VAT incorrectly charged to our business?

Hi,

We are a UK based ltd currently starting to store and sell in Amazon Germany.

Amazon is deducting the VAT from the German orders. We are VAT registered in Germany and Amazon should not use the Marketplace Facilitator Vat deduction as we are responsible for submitting the Vat to the German Authorities.

How can we fix this?

Thanks

Hello,

When customers from Ireland order, we are being deducted 23% VAT "Net Proceeds will not include VAT for Marketplace Facilitator order".

I understand Amazon is acting as the middle-man here, and basically purchasing our product then selling it on.

However the way they do it doesnt make sense and wipes out all our profits. As we are not VAT registered, VAT hasnt been costed into our prices, yet Amazon deducts the VAT from us.

For example, a £25 product would give us £5 profit. However for Marketplace facilitator orders, they are withholding near-enough £5 VAT which gives us £0 profit.

Surely, as the buyer is responsible for paying VAT, which is then collected by Amazon as the facilitator, the VAT should NOT be deducted from us, but should be added on top of the price that we are selling it for. E.g. Amazon should be buying it off us for £25, then selling it on to the Irish customer PLUS VAT.

Is there a way of changing the settings so that VAT is added on top of the price rather than deducting it from the current selling price? Thanks.

Our business is based in the UK but not VAT registered. We are VAT exempt on Amazon.