Claiming a VAT refund on your Amazon seller fees is a frequently discussed topic among Amazon sellers. In this article, I will clarify why you might be able to claim back any VAT that you’ve paid on your Amazon fees and exactly how to do it.

Amazon usually charges VAT on all of their fees until you can prove that you are a business entity. This is due to EU VAT regulation. Once you provide Amazon with your VAT number they typically stop charging you VAT on your fees and instead reverse charge the VAT on them. 

But what happens if you are trading as a business entity but you are not yet VAT registered?

Should you simply accept the extra costs that you incur due to Amazon charging you VAT on their seller fees with you not being able to then reclaim that VAT from your tax authority?

The short answer is no.

Who can claim back VAT paid on Amazon seller fees?

If you’re selling on Amazon and are established as a business in the UK or the EU (excluding Luxembourg) then you may be able to claim back any VAT you have paid on Amazon fees. Amazon themselves have referred to this in an older version of their Business Solutions Agreement:

Amazon Services Europe Business Solutions Agreement S-6(b) prior to Jan 2021 If you are in business and established in a European Union country, but you do not have a VAT registration number issued by one of the European Union countries, then you will be able to provide Amazon with other evidence that you are in business. Acceptable evidence is a copy of a recent corporate tax return or an official document issued by a government agency proving that you are in business. Once your evidence is reviewed and accepted by Amazon, VAT will not be charged by Amazon on the fees hereunder provided you are not established in Luxembourg.

Which Amazon fees can I claim a refund of VAT on?

Any fees invoiced from Amazon’s Luxembourg entity. This is typically all fees except Sponsored Ads in the country where your business is established. Eg. if your business is established in the UK then you should be able to reclaim VAT on all Amazon fees excluding Sponsored Ads from Amazon.co.uk.

Amazon sponsored Ads in your home country are usually billed with local VAT even after you have provided Amazon with your VAT number (once you become VAT registered) so those are not affected.

How do I qualify for a refund of VAT on Amazon seller fees?

If you can prove that you are a business (even a non VAT registered business) then you qualify to have any VAT you have paid on Amazon fees refunded. It’s that simple. From success stories that we have heard about in the Facebook groups this has been successfully done by hundreds of sellers.

What do I need to do to reclaim the VAT paid on Amazon fees?

The table below shows a summary of the actions you should take to reclaim any VAT you have paid on Amazon seller fees.

	SOLE TRADER	LIMITED COMPANY
VAT REGISTERED	Open a case with seller support, state you are a business and reference the terms. Provide trading name, VAT certificate and UTR. State the period you were non VAT registered and request a review and refund of VAT on fees for this period.	Open a case with seller support, state you are a business and reference the terms. Provide your certificate of incorporation and VAT certificate. State the period you were non VAT registered and request a review and refund of VAT on fees for this period.
NOT VAT REGISTERED	Open a case with seller support, state you are a business and reference the terms. Provide trading name and UTR. Ask them to stop charging you VAT on your fees and request a review and refund of VAT on fees for the time you have been trading.	Open a case with seller support, state you are a business and reference the terms. Provide your certificate of incorporation. Ask them to stop charging you VAT on your fees and request a review and refund of VAT on fees for the time you have been trading.

What to Message Seller Support?

Amazon seller accounting doesn’t need to be complex. In each of the above scenarios your message could read something along the lines of:

Dear Seller Support Our business would like to request a refund of the VAT we have paid on Amazon fees please. According to the Amazon Services Europe Business Solutions Agreement S-6(b): “If you are in business and established in a European Union country, but you do not have a VAT registration number issued by one of the European Union countries, then you will be able to provide Amazon with other evidence that you are in business. Acceptable evidence is a copy of a recent corporate tax return or an official document issued by a government agency proving that you are in business. Once your evidence is reviewed and accepted by Amazon, VAT will not be charged by Amazon on the fees hereunder provided you are not established in Luxembourg. You hereby give the following warranties and representations, namely: (i) that the evidence you submit to Amazon belongs to the business you operate, and that business is established in one of the European Union countries; (ii) that all transactions regarding the services will be business-related transactions made by the business associated with the evidence you submit to Amazon; and (iii) that the evidence and all other information provided by you is true, accurate and current and you will immediately update any such information held by Amazon in case of any changes.”  Please find below details that you can use to establish that we are a valid business: Trading/Company Name:  Tax ID (UTR or VAT number): Trading on Amazon since:  Attached is our company certificate of incorporation, issued by the UK Government and VAT certificate. [For VAT registered Limited companies only] Attached is our company certificate of incorporation, issued by the UK Government. [For Non VAT registered Limited companies only] Attached is our company Unique Taxpayers Reference (UTR) certificate from the Inland Revenue and VAT certificate. [For VAT registered Sole Traders only] Attached is our company Unique Taxpayers Reference (UTR) certificate from the Inland Revenue. [For Non VAT registered Sole Traders only] Please could we reclaim all VAT paid by our company since our Amazon Seller account was opened and ensure that no further VAT is charged on our Amazon fees. Kindest regards Your Name Title at company Company Name

Remember to use the relevant line for your business type regarding the documentation you will attach, and don’t forget to attach the documentation either.

How long does it take to get a refund of VAT paid on Amazon seller fees?

Once you submit your case to claim the refund of VAT paid on Amazon fees it usually takes anywhere from 1-3 months to be actioned. Amazon may come back and ask for further proof in the form of company tax returns or such like. Work with them to provide any details and documents they need (it will all be worth it in the end).

According to some sellers we have spoken to, Amazon confirmed they have quite the backlog of these cases so once your case gets to the right team you may notice that it goes quiet. This looks like they are simply working through the backlog so be patient.

Other Common Amazon VAT Refund Questions

How does claiming a VAT refund on Amazon seller fees impact my financial reporting and balance sheets?

Claiming a VAT refund reduces your expense on Amazon seller fees, positively affecting profit margins. This must be accurately reflected in financial statements, with the refund recorded as a receivable in the balance sheet until received, thus impacting your current assets.

As a non-EU business selling on Amazon, am I eligible for any similar refunds or tax benefits on Amazon seller fees?

Non-EU businesses’ eligibility for refunds or tax benefits on Amazon seller fees depends on their country’s tax laws and international tax agreements. Consult a tax professional for guidance specific to your business location and for identifying potential tax benefits.

What to do if you have any questions related to getting your VAT refund from Amazon?

If you are an Amazon Seller looking for free help with any Amazon related issues from me or other sellers with whom you can network, don’t hesitate and join our discussion forum for Amazon Sellers.

To stay in touch on Facebook, feel free to join and post into my large Amazon Seller Performance – Friendly Advice – Worldwide Facebook group, where you will be very welcome too.

If you would like to hire me to privately assist you, feel free to subscribe and reach out through my dedicated assistance page at www.onlyfans.com/kikaangelic, where I provide support with Amazon related matters in exchange for a small $24.99 fee. Alternatively, you can post into the free public discussion forum for Amazon Sellers, where I will answer your question.

Many Amazon sellers recently started trading stocks and crypto currencies, hoping to diversify their income, which is a very good idea with all the uncertainty which comes with the platform. For this reason, we launched a new Facebook group, Crypto Arbitrage Income (Bitcoin, Crypto, Altcoins, Blockchain, Trading) – feel free to join us and forget about the troubles of selling on Amazon for a moment!

Additionally, here you can watch my YouTube video, where I am presenting you several secret tips about appealing Amazon Seller Account suspensions (don’t be confused by the opening of the video, where I am enjoying a vacation – it’s a part of the story):

If you are an Amazon Seller who has been doing business involving importing from China for some time already, you may be familiar with the regular anxiety as February approaches each year. Every time Chinese New Year comes around, a lot of Amazon Sellers who rely on imports from China gets thrown for a loop. Rookie sellers often fail to anticipate the holiday’s impact on their production timelines, shipping timelines, and quality control.

As many seasoned sellers know, it’s critical to start planning for the CNY holiday far in advance. Factories shut down for several weeks, and after they reopen, it takes at least a few more weeks to get back up to full production capacity.

Here I will address the typical effects of these holidays and the actions you can take to avoid problems with your Amazon business.

How Long do Factories Usually Shut Down for Chinese New Year?

During the Chinese New Year holiday period, every factory in China shuts down… Yes, every factory. The official public holiday only lasts for seven to eight days. However, most factories are fully closed for two to four weeks.

Additionally, many Chinese factory workers take extra time off, leaving in the weeks leading up to company closure dates, slowing production down significantly. Many workers will not return immediately afterward, meaning it can take up to a month for production to return to full capacity after the holiday.

Why do Factories and Employees Take So Much Time Off?

Chinese New Year, also called the Spring Festival, is the country’s most important holiday. Like Thanksgiving or Christmas in the US, people travel back home to spend time with their families.

Since most factory workers are migrant laborers, they generally live far away from their hometowns and travel hundreds of kilometers or more to return home. If they have a husband or wife and children, it may even be one of the only times they see them during the whole year.

Companies require long closure times to allow workers to travel home and then back to the city where they work. 

5 Things You Should Note

With so many people traveling for Chinese New Year and the lengthy factory closures, there are certain things you need to understand if you want to properly manage your Amazon inventory and maintain your expected level of quality.

#1 It Takes Factories at Least a Month to Restart After Chinese New Year Holiday

You might assume that the same workers who left before the holiday will be coming back afterward. However, Chinese New Year is generally the preferred time to switch jobs in China.

Up to a third of workers might move to another factory or decide to stay in their hometowns and not come back. As such, your manufacturer needs to hire new workers and get them up to speed. Because of this, many factories will not be back to full production levels until about a month after Chinese New Year.

Based on my own experience, I had it frequently happen to me that a completely new salesperson turned up after February, who had no recollection of what I ordered before.

#2 There are Increased Quality Issues Before and After the Holiday

Before the holiday, factories are in a mad dash to get orders out the door, which leads to more things being missed and more quality issues than usual. You may see incorrect quantities of units received by Amazon FBA facilities following shipment, because your supplier opts to ship everything as it is (incomplete), as opposed to delaying and risking you cancelling the whole order. After the holiday, the factory needs to hire new workers who are more likely to make mistakes than experienced ones.

As such, consider stepping up your product inspection efforts in the months before and after the Spring Festival. 

#3 The Cost of Shipping Goes Up Drastically Around the Holiday

With the lengthy factory closures and the rush to get products out beforehand, manufacturers will often charge more if you want to ship an order close to Chinese New Year.

In addition to your factory taking time off, shipping companies also take time off. As such, heavy volumes are going to the ports before the holiday with only a limited number of ships, which means shipping rates go up.

Shipping rates have been a big topic in recent years, and they are much lower now than during the pandemic, but keep in mind that Chinese New Year is typically the most expensive time to ship.

#4 You Should Never Pay a Deposit Just Before the Spring Festival

Sometimes companies go out of business — and in China, the Spring Festival is the most common time of year to close down permanently. Factories that have not been doing well financially often choose to go out of business during Chinese New Year.

Paying a deposit just before the holiday can be a disastrous proposition. If your factory intends to close permanently and does not tell you, you may never get it back, so be sure to wait until they reopen.

#5 You Need to Forecast Far in Advance to Adjust for Production Times

As I have discussed, several factors affect production around the Chinese New Year. These include the rush before the holiday, the long closure times, and the ramp-up period afterward.

For any orders you would want to receive in March/April, you should start discussing them with your suppliers by around September/October.

When planning schedules, it is a good idea to take past data into account and also consider what may or may not happen globally. It is essential to forecast your inventory needs far in advance and consider many factors when developing your ordering schedule.

When do Factories Close for Chinese New Year 2024?

The dates for Chinese New Year and other traditional festivals are based on the Chinese lunar calendar, and thus they change every year, relative to the Gregorian calendar we use in the West.

February 10, 2024 is the first day of the “Year of the Dragon.” The official government holiday will last from February 10th through the 17th. Some factories may close earlier in the month and many will be fully closed for two to four weeks. So check with your factory contacts to get their exact closure dates.

As I have discussed, Chinese New Year is China’s most important holiday, leading to significant factory downtime and increased quality mishaps. As such, you should step up your quality control efforts around this time.

I hope you found this article helpful. If you are an Amazon Seller looking for free help with any Amazon related issues from me or other sellers with whom you can network, don’t hesitate and join our discussion forum for Amazon Sellers.

To stay in touch on Facebook, feel free to join and post into my large Amazon Seller Performance – Friendly Advice – Worldwide Facebook group, where you will be very welcome too.

If you would like to hire me to privately assist you, feel free to subscribe and reach out through my dedicated assistance page at www.onlyfans.com/kikaangelic, where I provide support with Amazon related matters in exchange for a small $24.99 fee. Alternatively, you can post into the free public discussion forum for Amazon Sellers, where I will answer your question.

Many Amazon sellers recently started trading stocks and crypto currencies, hoping to diversify their income, which is a very good idea with all the uncertainty which comes with the platform. For this reason, we launched a new Facebook group, Crypto Arbitrage Income (Bitcoin, Crypto, Altcoins, Blockchain, Trading) – feel free to join us and forget about the troubles of selling on Amazon for a moment!

Additionally, here you can watch my YouTube video, where I am presenting you several secret tips about appealing Amazon Seller Account suspensions (don’t be confused by the opening of the video, where I am enjoying a vacation – it’s a part of the story):

Amazon PAN European FBA is a program offered by Amazon that allows sellers to store their inventory in multiple European fulfillment centers. With PAN European FBA, sellers can distribute their products across several European countries more efficiently, allowing for faster and more cost-effective delivery to customers.

This means when your FBA product is sold in one of these other European Marketplaces, you will only pay the local fulfillment fee instead of the more expensive cross-border fee for each order shipped.

It also makes you Prime-eligible and more visible to more shoppers in Europe.

Available Countries for PAN European FBA

The Amazon PAN-EU fulfillment centers are currently located in the following countries.

1. United Kingdom (UK)
2. Germany
3. France
4. Italy
5. Spain
6. Netherlands
7. Sweden
8. Poland
9. Czech Republic

These countries are part of the Amazon European Fulfillment Network, allowing sellers to store inventory in multiple fulfillment centers across Europe. By using PAN European FBA, sellers can reach customers in these countries more efficiently and take advantage of Amazon’s logistics network for faster and more cost-effective order fulfillment.

Fulfillment Options for Amazon’s European Networks

When selling within the European marketplaces, you have 3 different fulfillment options.

• European Fulfillment Network (EFN)
• Pan-European FBA
• Multi-Country Inventory (MCI)

Why will You Choose PAN European FBA?

There are several reasons why you might choose PAN European FBA as your preferred fulfillment method:

Effortless Inventory Management: PAN European FBA simplifies inventory management by allowing sellers to consolidate their inventory across multiple European countries. This centralized approach enables efficient tracking, replenishment, and distribution of stock, ensuring products are readily available to meet customer demand.

Lower FBA Fees: Utilizing PAN European FBA can lead to potential cost savings for sellers. By storing inventory in Amazon’s fulfillment centers across Europe, sellers can benefit from lower fulfillment fees compared to shipping products individually to different countries.

Access to European Customers: PAN European FBA provides sellers with access to a wide customer base across Europe. By utilizing Amazon’s extensive logistics network, sellers can efficiently reach customers in multiple countries. This expanded market reach, opens up new growth opportunities and the chance to tap into diverse customer demographics.

Fast and Reliable Deliveries: With inventory strategically placed across Europe, PAN European FBA enables fast and reliable deliveries to customers. This reduces shipping times and improves the overall customer experience.

Local Customer Service: PAN European FBA leverages Amazon’s established customer service infrastructure to provide local support to customers. Sellers can benefit from Amazon’s expertise in handling customer inquiries, returns, and other service-related issues. Local customer service enhances the overall shopping experience, instills confidence in customers, and fosters trust in the seller’s brand.

The Difference Between EFN and PAN-EU FBA?

The key difference between Amazon EFN (European Fulfillment Network) and PAN-EU FBA (Pan-European Fulfillment by Amazon) lies in handling inventory and fulfillment. 

Inventory Placement: With Amazon EFN, sellers can store their inventory in a single European country of their choice, typically their home marketplace. The inventory is then made available for sale across all eligible European marketplaces. 

In contrast, PAN-EU FBA requires sellers to send their inventory to multiple Amazon fulfillment centers across Europe, and Amazon automatically distributes the inventory to the most suitable fulfillment center based on demand and customer location.

Fulfillment and Shipping: Under Amazon EFN, when an order is placed in a European marketplace, Amazon fulfills the order from the seller’s chosen fulfillment center. This means that the order may need to be shipped across borders, potentially resulting in longer delivery times and higher shipping costs. 

On the other hand, with PAN-EU FBA, Amazon handles the fulfillment and shipping logistics. When an order is received, Amazon selects the inventory from the most appropriate fulfillment center within the European network, ensuring faster and more cost-effective delivery to the customer.

Cost Structure: Both Amazon EFN and PAN-EU FBA involve fees and expenses. However, the cost structure differs between the two programs. With EFN, sellers typically pay lower fulfillment fees but may incur higher shipping costs due to cross-border shipping. 

PAN-EU FBA, on the other hand, involves higher fulfillment fees but provides the advantage of having inventory stored strategically in multiple countries, potentially reducing shipping costs and delivery times.

Prime Eligibility: Another notable difference is Prime eligibility. With PAN-EU FBA, sellers have the opportunity to make their products eligible for Amazon Prime in participating European marketplaces. This can significantly enhance product visibility and attract Prime members who enjoy fast and free shipping. 

Amazon EFN does not offer automatic Prime eligibility.

Eligibility of PAN-European FBA

1. You must have a European unified account. With a European unified account, you can create and manage offers on all Amazon European stores
2. You also need to ensure that your account is in good standing and that you are not blocked in any of the countries where listings are required for PAN European
3. You need to choose which and how many ASINs you want to enroll in PAN European
4. For an ASIN to be enrolled in PAN European, you need to create an active FBA offer in all the marketplaces listed as required on the PAN-European FBA
5. Manage your inventory page in your Amazon account. In most cases, these marketplaces are Germany, France, Italy, and Spain
6. You need to send your inventory to an Amazon fulfillment center in one of the following countries- Germany, France, Italy, Spain, or Poland 

Cost of Amazon PAN-EU FBA

Before starting the PAN-EU FBA, you need to take into account the cost, because it’s a bit complex. Standard Selling on Amazon fees applies for each marketplace on which an ASIN is listed. According to Amazon, the following fees apply to Pan-European FBA stock-

Fulfillment Fees: For ASINs enrolled in Pan-European FBA, you will pay only the Fulfilment

Fee for the marketplace in which the order is placed, no matter where the stock is stored in

the Amazon European Fulfilment Network.

Storage Fees: Pan-European FBA ASINs will incur monthly storage fees and may incur

Long-Term Storage Fees if units remain in stock for 12 months or more.

Removal Fees: For removals (return of stock to you) from your Pan-European FBA stock

ordered to an address in the country of your home marketplace, we will charge local

removal fees applicable to your home marketplace, regardless of where the stock is located

at the time of the removal order.

As Pan-European FBA allows you to store goods in various fulfillment centers in Europe, and as the product is therefore always near the customer, you only pay the local fulfillment fee.

But Once you have joined the Pan-European FBA program, you will have specific tax return requirements for each country. Some countries require monthly VAT returns, and some require returns every quarter. 

Unless you are an expert, you’ll need a specialist acting on your behalf. The following fees apply to Pan-European FBA stock.

• Note: The local fee does not apply to oversize products

Advantages of PAN European FBA

The PAN European FBA program offers several advantages for sellers who want to expand their business in the European market. Here are some key benefits:

Expanded Market Reach: By utilizing PAN European FBA, you can increase your FBA sales by up to 30 percent by selling and storing your products all across the European Union. Also, you can easily reach customers across multiple European countries.

Flexibility: You have the flexibility to choose in which countries you place your stock, the more countries enabled the greater the advantages

Prime Eligibility: Sellers can make their products eligible for Amazon Prime. So, as a seller, you can reach millions of customers internationally by selling with the prime badge in countries you selected for inventory placement. It also significantly increases product visibility and encourages more customers.

Cross-Border Sales Made Easy: You can save on your fulfillment costs by up to 53 percent since you stop paying cross-border fees in countries you have enabled inventory placement and will be charged local fulfillment fees instead. It simplifies the process by handling customs clearance and managing tax collection on behalf of the sellers, making cross-border sales more seamless.

Simplified Logistics: Amazon takes care of the storage, packaging, and shipping processes that relieve sellers of the burden of managing their own warehouses and fulfillment operations. 

All you have to do is, send your inventory to a fulfillment center of your choice in Germany France Italy Spain, or Poland, then an Amazon algorithm will determine how much inventory to distribute to each country that you enabled for storage based on the customer demand. Amazon will also fully take care of the inventory redistribution across the countries

Reduce Fulfillment Fees: You can even reduce your fulfillment fees on low-cost products since FBA small and light products are now also eligible for PAN EU. You can save up to 0.26 Euros on every FBA unit fulfilled from Germany by storing your products in the Czech Republic, Germany, and Poland

Cost-Effective Inventory Management: It reduces the need for maintaining separate warehouses in each country, leading to cost savings in terms of storage and logistics.

Domestic FBA Fulfillment Fees: You can enjoy the domestic FBA fulfillment fees for orders in Belgium, the Netherlands, and Sweden by activating your FBA listings in those countries and storing your products in Germany or in France for Belgian orders.

Disadvantages of PAN European FBA

While Amazon PAN European FBA offers numerous benefits, there are also some potential disadvantages to consider:

Increased Costs: Utilizing PAN European FBA involves fees and expenses. Sellers are responsible for storage fees, fulfillment fees, and other associated costs. It’s essential to carefully evaluate these expenses and ensure they align with the profitability of the products being sold.

Inventory Management Challenges: Managing inventory across multiple European countries can be complex. Sellers need to accurately forecast demand, monitor stock levels, and ensure proper inventory allocation to different fulfillment centers. This requires effective inventory management practices and systems.

Market Saturation: With the popularity of PAN European FBA, there is increased competition among sellers. The program attracts numerous merchants aiming to expand their presence in the European market, which can lead to market saturation in certain product categories. Sellers must differentiate their products and implement effective marketing strategies to stand out.

Product Restrictions and Compliance: Certain products may be subject to restrictions or regulations in specific European countries. Sellers need to ensure compliance with local laws, safety standards, and product regulations to avoid potential complications or restrictions on their inventory.

Potential Language and Cultural Barriers: Expanding into multiple European countries means dealing with diverse languages, cultures, and customer expectations. Sellers must be prepared to adapt their marketing materials, customer service, and product descriptions to cater to different markets effectively.

Final Thoughts,

Amazon PAN European FBA offers a powerful solution for sellers looking to expand their reach in the European market. It provides a seamless and convenient fulfillment option that can enhance the shopping experience for customers. 

By utilizing PAN European FBA, sellers gain access to multiple European countries, benefiting from faster delivery times and Prime eligibility. Compared to EFN, PAN European FBA allows for strategic inventory placement in various fulfillment centers, optimizing shipping costs and reducing delivery times. 

I hope you found this article helpful. If you are an Amazon Seller looking for free help with any Amazon related issues from me or other sellers with whom you can network, don’t hesitate and join our discussion forum for Amazon Sellers.

To stay in touch on Facebook, feel free to join and post into my large Amazon Seller Performance – Friendly Advice – Worldwide Facebook group, where you will be very welcome too.

If you would like to hire me to privately assist you, feel free to subscribe and reach out through my dedicated assistance page at www.onlyfans.com/kikaangelic, where I provide support with Amazon related matters in exchange for a small $24.99 fee. Alternatively, you can post into the free public discussion forum for Amazon Sellers, where I will answer your question.

Many Amazon sellers recently started trading stocks and crypto currencies, hoping to diversify their income, which is a very good idea with all the uncertainty which comes with the platform. For this reason, we launched a new Facebook group, Crypto Arbitrage Income (Bitcoin, Crypto, Altcoins, Blockchain, Trading) – feel free to join us and forget about the troubles of selling on Amazon for a moment!

Additionally, here you can watch my YouTube video, where I am presenting you several secret tips about appealing Amazon Seller Account suspensions (don’t be confused by the opening of the video, where I am enjoying a vacation – it’s a part of the story):