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VAT on Amazon fees- a recent change?
Apologies if this has been raised or answered before but I find these boards horrible to use. (mainly this is just because I'm an old timer and can't cope with change ;-) )
Since the middle of May the invoices I receive from Amazon, in the tax document library are now showing 20% VAT whereas before they were attracting 0% VAT. The invoice numbers now have a GB prefix rather than a LU prefix.
As I'm VAT registered at one level this makes no difference as I reclaim the VAT anyway, but it does have an impact on cash flow as I assume that the 20% is being withheld from regular disbursements and of course VAT is only reclaimed on a quarterly basis?
Is it now also the case that all non VAT registered sellers are being charged 20% on fees. Before there were substantial numbers of sellers who weren't charged.
Any comments which either confirm or contradict my observations would be most welcome
19 replies
Seller_QuM1AZgzfU9x4
Can't comment on what you're seeing, but Amazon are making changes to VAT billing from 1st August.
From that point VAT will be billed from the country of seller's establishment (UK/EU). That will mean an end to reverse charging of VAT on fees for VAT registered sellers and an end for those sellers who claimed an exemption on the basis of not being registered for VAT.
Seller_ZVAz3d5lZuGid
Hi Nick - This is the email I received - I'm not VAT registered, but now, I think we will all pay VAT on fees, even if we were exempt before:
Hello,
Effective August 1, 2024, Selling on Amazon, Fulfillment by Amazon, and all other services currently supplied by Amazon Services Europe S.à r.l. ("ASE") will be supplied by Amazon EU S.à r.l. ("AEU"). All agreements, policies, terms and conditions currently referring to ASE, including Amazon Payments agreements, will be updated to AEU.
Additionally, all invoices issued by Amazon will be issued by AEU, instead of ASE after August 1, 2024.
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 deducted from 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.
Note: This change doesn’t impact your account access, listings, product pricing, customer reviews, selling services, or the price of services.
For more information, go to: Update to Amazon UK and EU seller services entity and VAT treatment
The Amazon Services Europe team
Seller_IfSV5eBt32Mxj
Might be worth checking you vat number is still verified on Amazon. We had to re-verify ours about 6 weeks ago along with a few other sellers, during those few days they started applying vat to seller fees.
Seller_OFjSrssNgD9RS
I received the email stating that Vat would be charged on fees from 1st August.
However, I noticed they applied this to my account on 26 May 2024 with no warning.
It does affect cash flow.
Seller_GJP3Cbt07uSu0
From 1st August those who were trading as vat exempt and under the vat turnover, which is now 90k in the UK, will be charged vat on invoices. They were previously not getting this. Those who are vat registered would have had reverse charge vat setups. Which means 2 vat entities having a different way of charging. From August 1 this will change and vat will be charged to be claimed back in quarterly returns. Also, all previous non-vat entities will be charged vat going forward.
Seller_tRuvBEHDedp4q
As others have stated, as from 1st August Amazon will be invoicing from country of establishment (putting an end to accounting for the VAT under Reverse Charge) so everyone will now get charged VAT (which if you are VAT registered can reclaim)
Yes this will impact cashflow until you reclaim on next VAT return and for those who are not VAT registered and claiming VAT exemption they will now see a rise in their fees.
However at end of May you should have been asked to verify your VAT number by sending your VAT Certificate to Amazon. During the verification process all fees were invoiced from GB and not LU - why they have done that is a mystery. I was asked to submit/verify my number of 26th May and it went through on the 3rd June. I now have a LU invoice covering 1st - 26th May, a GB invoice (with VAT added) from 27th-31st May, a GB invoice from 1st -3rd June, then a LU invoice from 4th-30th June.
Seller_hOZNPw7G8FIjl
I always have been, so no change for me
Seller_hOZNPw7G8FIjl
Thank you - how would I do that?
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