VAT on Eu orders from UK FBA/MFA

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Seller_U7pnHcvt42UDQ

VAT on Eu orders from UK FBA/MFA

Hi Everyone,

I am not yet VAT registered.
When I sell products to UK consumers the sale is EX VAT as I cannot charge VAT, I pay VAT on Amazon fees etc this is fine.
What is confusing me is when I sell a product to Ireland / Germany etc Amazon collect the VAT from me however on other platforms the Sale price is automatically inflated to take account of this, however on Amazon I seem to be paying, for example:

I list item for sale at £40 UK buyer pays £40 I receive proceeds less Amazon fees
Same Item bought by EU buyer, they pay £40 I receive proceeds less VAT at 20% and less Amazon fees.

On other marketplaces the customer would be charged £48 if they were not in UK for the same item therefore leaving me with similar proceeds whether its being sold to UK or elsewhere.

Am I being stupid as I cannot see a way to do this on Amazon and so have turned off all other countries other than the UK for both MFA and FBA.

Thanks

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Tags:International expansion
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Seller_7VbclcPFFRTnc

That’s what many sellers have done

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Seller_tRuvBEHDedp4q

Unfortunately, the way Amazon has implemented IOSS is different from how other marketplaces have implemented it.

You are correct that as a non VAT registered business, if you advertise an item at £40 on other marketplaces, they would charge the customer £48 and your profit would be the same.

But on Amazon they always remove VAT from your proceeds, then add it back on to charge the customer. This effects not only non VAT registered businesses, but also sales to other countries where VAT rate is different (for example, if I sell something to a country with 22% VAT, Amazon will remove the 22% VAT element from my proceeds, when they should be removing 20% UK VAT element then adding on 22% to charge the customer)

I have opened cases with SS on this issue but they insist that their methodology is correct - even though it is completely different from every other marketplace we sell on. As such we no longer sell internationally on Amazon.

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Seller_tRuvBEHDedp4q

The other workaround would be to add the estimation of the extra costs to the international shipping cost. Then your UK prices would stay the same.

It depends on how complicated and granular you would want it and how much variance there is in your product prices. For example, you could change the amount added depending on country being sent to and their VAT rate. Or just work out the average sale amount and add the highest VAT rate in the EU then you are covered.

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