Can you tell me more?

The problem is that we have a UK limited company but deemed not established for VAT purposes. Therefore Amazon is deducting 20% VAT on our sales.

But since our company address is in the UK, Amazon will charge 20% on all its services from 1st August.

So we are going to be impacted from both sides. First, 20% VAT on sales. and then paying 20% VAT on services.

Is there a way around this problem? it seems rather unfair.

I thought (but I could be wrong) that VAT on fees will be applied in your own country of residence/establishment.

So for example, if I advertised on Amazon FR, then Amazon will collect the VAT on the sale to forward to French tax authority, but the VAT on the fees will come through on my UK invoice charged at UK rate.

If you are not UK established for VAT purposes, then I would have thought Amazon will invoice you from wherever you are established and apply the VAT rate based on your country of establishment - then you reclaim this in the exact same way you reclaim VAT for other goods/services in your own country.

If you are VAT registered, you don't pay VAT on referral fees and FBA fees. Is this changing from August?

Cheers @Seller_tRuvBEHDedp4q . I believe that is the case, VAT on sales in the UK, Amazon takes and remits to HMRC at source. VAT on seller fees (in my case Irish registered business) I think I need to reclaim these on my Irish VAT return? Amazon won't be the ones to conduct the VAT refund in this case then right ?

Yes - its in announcements that as from 1st August Amazon will be invoicing for its fees from its UK office (and hence charge VAT) and not its Luxembourg office (and applying Reverse Charge VAT)

That is my understanding yes

So if you sell something on Amazon UK for £12, Amazon will send £2 to HMRC and you get £10 added to your account

If Amazon charge 20% fees then your Irish invoice for fees will be £12 * 20% = £2.40 + Irish VAT

So you will be disbursed £12 - £2 - (£2.40 + Irish VAT)

You then reclaim the Irish VAT on fees on your next return and mark the sale as £10 (Vat not applicable) in your accounts

Do you have a link to this?

Its been pulled from several sources and outside links are banned on Amazon anyway.

My advice is to ask your accountant to check.

But - VAT is not applicable to goods exported and Amazon are the deemed supplier for VAT purposes only. So anyone (who is not UK established) selling something at £12 on UK site, then Amazon is the deemed supplier. You actually sell to Amazon at £10 and Amazon sells to customer at £12 and sends £2 to HMRC.

Your sale is £10 (VAT not applicable as an export) for accounting purposes.

The fees on invoice is my understanding of the recent changes Amazon are making on 1st August here you will be invoiced from an office in same country where you are established. And just like any invoice for goods/services Amazon will be adding VAT at the rate your country specifies.

This is certainly the way eBay are doing it and have been doing it for several years. But this is Amazon so they may do it differently but it is my understanding.

Hi,

We are UK based so all good.

Have found the link on Amazon though.

https://sellercentral.amazon.co.uk/seller-forums/discussions/t/fe8e800e-d95c-42ae-a98b-e6e682547f90

Thanks.

I am not sure if that is correct for Ireland. It may be that they will still be invoiced from Luxemburg. Whether it will be reverse charged, I don't know, but it should be no different to now if from LU.

If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply and VAT will be charged on your Amazon fees. In the majority of cases, we expect that you will be able to recover this VAT through your normal VAT return process.

We recommend that you contact your tax advisor for more information on recovering VAT as per your country of establishment's local regulation.

If your company is not established in the countries listed above, you will be invoiced by the AEU head office in Luxembourg, and there will be no change to how VAT is applied on Amazon fees.