Amazon still not calculating EU marketplace VAT correctly
Yes I know this has been said before and I thought I had removed all international listings - but I must have forgotten 1 template which allowed an order to Ireland - and it seems Amazon still are NOT doing this calculation correctly.
Item is listed on UK site and so includes UK VAT (where applicable). Now if I had it listed on the Irish site, yes I should list including Irish VAT. But I am not and therefore Amazon have to correct any price themselves to facilitate marketplace tax - or tell the buyer at checkout what extra they need pay for the tax.
So price on uk site is £23.49 with postage to Ireland set at £11
Now I expected Amazon to
Remove UK VAT (20%) on £23.49 - £3.91 but they removed Irish VAT (23%) of £4.39
Then on my shipping cost - as this is an export I calculated shipping with no VAT as I should, so there is no UK VAT to remove on the £11
But Amazon have again removed Irish VAT of £2.06
So I am expecting proceeds of (£23.49 - £3.91) = £19.59 plus (£11 - £0) = £11 - Total £30.59
But Amazon are going to pay me
(£23.49 - £4.39) = £ 19.10 plus (£11 - £2.06) = £8.94 - Total of £28.04
Obviously I am ignoring Amazon fees itself - but I am now down £2.55 on the sale
The customer would then be charged
For item: £23.49 - UK VAT £3.91 + Irish VAT £4.50 = £24.08
For shipping: £11 - UK VAT (n/a) + Irish VAT £2.53 = £13.53
Total: £37.61
I thought I saw a posting some time ago saying they had corrected this discrepancy. I had thought of opening up internationally again but I dont think I will as it seems Amazon are still doing it wrong.
3 replies
Seller_oYl0UE5Ve5HSf
No still not fixed I am afraid.
We have a case open about this since - Jul 11, 2021.
Pretty much have had a weekly response saying:
Thank you for your continued patience. We are currently researching your issue in partnership with the responsible team and will provide an update as soon as any additional information becomes available.
Except for the couple of times they have come back with a generic response explaining how VAT calculation works and close the case. I go back explaining that is wrong and then the cycle begins.
Seller_tRuvBEHDedp4q
Well Ive had a reply which says:
Hello from Amazon Selling Partner Support,
For sales of goods impacted by EU VOEC, the VAT rate collected and remitted by Amazon will be the one applied in the country of delivery of your customer.
For orders which are fulfilled by Amazon (FBA) or fulfilled by selling partners (MFN) from within the EU, Amazon will calculate and include that VAT rate within the price paid by the customer at checkout, making sure that:
• The price paid is inclusive of the VAT applied in the country of delivery selected; and
_• The Selling Partner’s net proceeds are unaffected, even if the VAT rate changes. _
For orders which are fulfilled by selling partners (MFN) from outside of the EU, Amazon will calculate the VAT applicable to the sale according to the delivery country from within the list price paid by the customer at checkout. This may result in variation in your net proceeds according to whether the VAT rate applicable in the delivery country is higher or lower than that included in the list price.
In all the cases, if you are enrolled in VAT Calculation Services, for sales of goods impacted by EU VOEC Amazon will not use any product tax codes you have provided for this calculation. Your product tax codes will continue to be used for supplies where you are liable to account for the VAT due.
Please let us know how we did.
So they can calculate it correctly for FBA and MFN sales within EU so that (and I quote)
• The Selling Partner’s net proceeds are unaffected, even if the VAT rate changes.
But they are not going to do it correctly for MFN sales from outside the EU
UNBELIEVABLE THAT A MAJOR COMPANY LIKE AMAZON CANNOT GET THIS RIGHT. THE REGULATIONS IN HOW THE MECHANISM OF HOW THE TAX IS CALCULATED IS THE SAME WHETHER INSIDE OR OUTSIDE THE EU.
I BELIEVE IT IS ONLY HOW THE IOSS CODES WORK AND THE WAY THE TAX IS FORWARDED BY AMAZON CHANGES DEPENDING IF SALE WAS FROM OUTSIDE OR INSIDE EU.
Amazon will be in fact collecting too little tax and the seller suffers from less proceeds
For example, sale of £120 on UK site going to Ireland (23% VAT)
Amazon will give seller proceeds of £120 - £22.44 (Irish VAT) , forwarding the £22.44 to the tax authorities
When what they should be doing is £120 - £20 (UK VAT) = £100 + £23 (Irish VAT) and forwarding £23 to the tax authorities.
Seller is down £2.44 on net proceeds and tax authority is down 56p
TBH I am looking at my business insurance to see if free legal help is included and I am thinking of taking this further
Seller_tRuvBEHDedp4q
Wow 2 more responses from Amazon
First basically stating they are correct
Second saying
To avoid to receive MFN orders on amazon.co.uk from EU in the future make sure to update and assign to the correct SKUs a shipping template where you do not deliver to any EU country.
Therefore basically saying that MFN sellers on UK site should no longer be selling and shipping into the EU. Way to go Amazon!!!
