Under VAT threshold in Italy but Amazon still retaining VAT amount?
Hi all,
I wondered if someone could clarify for me…
I sell in Italy (ship the goods direct to customer site from the UK) from time to time and fall well below the VAT threshold. I noticed that Amazon are retaining the VAT amount. Is this correct?
Thanks
16 replies
Seller_ejwc84JNL5Uk6
No that’s not correct - Amazon do not get involved in either collecting, retaining or paying over VAT in any country
Must be something else.
Seller_qZO3ZCjoBXEeL
Are you VAT registered in the UK and using Amazon VAT calculation services?
If so sales to registered business customers in Italy may be sold under the reverse charge VAT scheme, where VAT is not charged at all, but you must account for it on your own VAT returns and EC sales list filings.
Seller_L10ZxYkVk6rl6
Hi,
I am VAT registered in the UK but nowhere else. I’m not using Amazons VAT calculation services - or unaware I am!
Seller_kVhyRToenIXZm
What makes you think they are retaining VAT?
Seller_L10ZxYkVk6rl6
So, ive done a little more investigating and have found that this only seems to apply to Italy.
If I search under the Italian territory under “reports” then “transaction view” I can see that the total amount on the order screen is different to that in the transaction details.
By example;
--------------------transaction view total---- order screen total ----difference %
25th May -------880 ---------------------------1044 --------------------15.7
20th May -------456 ---------------------------535 ---------------------14.8
20th May ------ 1081 ------------------------ 1286 ---------------------16
12th May------- 1301 ------------------------ 1550 --------------------16
27th April ------ 409 ---------------------------409 ---------------------- 0
3rd April --------125 --------------------------- 125 -----------------------0
6th March ----- 686 --------------------------- 686 ---------------------- 0
all others beyond this match
What is going on?!
Seller_RqgfkW8AiIeFE
I suggest taking a look at a flat file of a recent Amazon payment that you are certain has a few orders delivered to Italy. Go to Reports>Payments>All Statements and download the flat file. I use the V2 version. Then you can locate the orders by order ID and see what transactions actually posted. In the flat file V2 in column N with header ‘amount-description’, you can also filter by tax related descriptions to see what tax related transactions there are.
Also, it may be useful to search for a few of those order IDs in the Amazon Seller Central search box to bring up the order and see how the order transacted for the customer and confirm that the info on the flat file and the order make sense.
If you need to find orders shipped to Italy, you can download the Amazon Fulfilled Shipments report by going to Reports>Fulfillment by Amazon>Amazon Fulfilled Shipments. You can filter by Ship Country. I’m assuming you use FBA.
Seller_L10ZxYkVk6rl6
Thanks for your input. This is the latest response ive had back from Amazon…
Please advised that 0% VAT charged on the transaction because the buyer had a VAT number that was valid on the VAT Information Exchange System (VIES) at the time that the transaction took place. This means that it is a B2B transaction.
This is outlined in the EU VAT Calculation Service Methodology, Section 5.2 Customer VAT Registrations, “All EU Member State granted VAT registration numbers that have been supplied by the Customer in their Amazon account will be taken into consideration.”
This means that if the buyer has a VAT number that is valid in VIES, then that VAT number will be used the calculate the VAT Exclusive price of the items that are sold.
Further you shipped the item from UK to IT, this means that your UK VAT number is used for this transaction.
This is outlined in the EU VAT Calculation Service Methodology, Section 8.1 Calculation of VAT from the display price to determine the [actual or] VAT exclusive price:
“If the Seller does not have a VIES-valid VAT registration number in the marketplace country, then VAT Calculation Services will use the Seller-defined ‘default country for VAT exclusive price’ location rate to determine the VAT exclusive price from the display price. The VAT rate applied depends on the PTC defined by the Seller in their tax settings alongside other logic requirements.”
Seller_L10ZxYkVk6rl6
Thanks guys, its not something I was aware of signing up to! Im unsure of how best to proceed with it as previously I would log Amazon sales as one lump on Quickbooks but now it seems I need to itemise each sale as some will have VAT on and some wont.
Im guessing if I opt out of Amazons VAT Calculation service (if thats possible) then I will lose business sales as the business buyers wont be able to claim VAT back?
Seller_L10ZxYkVk6rl6
So I then ask about Amazons VAT Calculation service and get this response which seems to contradict that of the previous message. Amazon seller support really are a joke!
Hello from Amazon Selling Partner Support,
Between B2B transaction there are never charged VAT, this has nothing to do with VAT calculation service (VCS).
VCS is only applying jurisdiction selection logic uses information from four transaction-related details to determine whether it is a B2B or B2C transaction as well as the VAT jurisdiction and tax type (i.e. VAT). This means this are tax legal stuff.
Seller_L10ZxYkVk6rl6
This is the latest response I got from them…
Hello from Amazon Selling Partner Support,
Please read carefully what I wrote: " this has nothing to do with VAT calculation service (VCS)". This is referring to the Invoice generating Service called VCS (VAT calculation service.)
SO basically the person has responded saying it has nothing to do with VCS and is actually related to VCS!
Where do they get these people?!
