Why is there 0 VAT to pay on all my seller fees
Hi Guys,
I imagine that this may have been asked before, however im still struggling to get my head around Amazons seller Fees and the applicable VAT.
I get monthly emails from Amazon saying my VAT invoice is ready to view (we are a VAT registered business, based in the UK). However, when i go to Reports –> Tax Document Library -> Seller Fee Invoices (tab) there is never any VAT being charged, why is this?
The always useful seller support answer is that Amazon dont charge VAT on B2B transactions, which is what Amazon considers this to be, and as a result are not charging us VAT. Which again makes zero sense, becuase whenever we deal with other businesses in our usual course of business we always charge VAT to them on invoices, so why is Amazon unique from this requirement?
Im asking because we need to include VAT on seller fees in our quarterly VAT returns
Seller_7VbclcPFFRTnc
You should be able to just use the summary function then in date range reports
Income box is net and tax box bottom right is vat on sales
Expenses invoices are in tax document library. All bar advertising should be 0% rated.
Advertising is 20% which can be claimed back
21 replies
Seller_qZO3ZCjoBXEeL
Because you are VAT registered the VAT on the Amazon invoices is reverse-charged (it says that at the bottom of the invoice - saying you are responsible for the VAT).
I forget the specifics but you essentially account of it as both input and output so net zero to pay.
Seller_7VbclcPFFRTnc
Hopefully you have an accountant who is correctly processing the reverse charge on your vat returns?!
Seller_VJFloi7Cs0iaR
This is one of the main reasons prices are going through the floor on a lot of popular products, relatively new sellers not completely understanding the economics of selling on Amazon therefore pricing too low, assuming they can claim back VAT that they haven’t paid, thus destroying any margin they thought they had when the VAT bill comes in.
Seller_KZhPnqSRrvTv0
PeterB answer is correct.
There isn’t any VAT charged by Amazon on their fees, so nothing to claim back on this, however, if you sell in a category whereby you have to pay for customer returns by them using an Amazon provided returns label, you are charged VAT on these return postage labels. Furthermore, Amazon advertising also includeds VAT, so, once again, if you use their sponsored products / advertising, this does include VAT, this VAT can of course be claimed back.
You can find these in the tax document library, under Merchant Buy Shippng Label, and Product Ads VAT Invoice.
Seller_eSb5BPO9vbzff
Brilliant,
Last question for you, is there anyway of doing a bulk download, which shows how much VAT we have actually been paid for our sales (again this will go to our accountant to show how much VAT we have been paid as part of the sales we have made)
Seller_7VbclcPFFRTnc
Reports - payments - date range reports
Either leave it as transaction and total the columns or set it to summary and the tax box bottom right is the VAT on sales
Transaction is good if you sell outside uk
Are all your product standard 20% rated ?
Seller_7VbclcPFFRTnc
Are your sales to uk only customers ?
Seller_eSb5BPO9vbzff
Yes currently everything is to UK consumers
Seller_7VbclcPFFRTnc
You should be able to just use the summary function then in date range reports
Income box is net and tax box bottom right is vat on sales
Expenses invoices are in tax document library. All bar advertising should be 0% rated.
Advertising is 20% which can be claimed back
Seller_tRuvBEHDedp4q
Basically because Amazon are based outside the UK, then the service they provide the VAT is reverse charged.
If Amazon were based in the UK, you would see the VAT added as normal to claim back.
You do have to account for the VAT as if it were paid though on your VAT return
So, for example, If total Amazon fees were £100 in the quarter, VAT on this would be £20
I cannot remember the exact box numbers you enter this into but you add that £20 to 2 boxes - 1 for VAT paid, the other for VAT claimed - so in effect they cancel each other out. This is the reverse charge mechanism.
