If you’ve landed on this article, there’s a good chance you own an ecommerce business with a VAT taxable turnover below the UK threshold (£85,000). If so, you’re likely wondering whether or not you’re allowed to sell on Amazon as a merchant without VAT registration.
In this article, I will be addressing this question, as well as exploring the benefits of selling on Amazon, what being non-VAT registered means for international selling and some potential pitfalls and how to avoid them.
Do you need to be VAT registered to sell on Amazon?
The short answer to this question is: yes, you can sell on Amazon if your business isn’t VAT registered. However, there is a more complicated version of the answer too, which is important to familiarise yourself with.
Firstly, if your VAT taxable turnover is above the UK threshold, which is currently set at £85,000, you are legally obligated to register your business for VAT – Amazon or no Amazon. If your VAT taxable turnover is still below this threshold, you aren’t legally required to register for VAT, however, some businesses choose to register voluntarily.
This is the case for UK ecommerce businesses selling products within the UK. However, things start to get a little more complicated where international (non-UK) sales are concerned.
Amazon VAT registration and international selling
The great thing about Fulfilment by Amazon (FBA) is that it allows UK merchants to sell their products to customers around the world with minimal effort on their part. That said, while Amazon FBA simplifies the logistics, it’s not there to fulfil any financial obligations on behalf of the ecommerce businesses that sell through the platform.
That’s why, if you are going to sell internationally via Amazon, you need to ensure that, even if you aren’t yet legally required to register for UK VAT, you’re adhering to the VAT requirements of the countries you’re selling and storing in.
For example:
You could be a UK business, selling in the UK and earning under the UK VAT threshold and therefore don’t need to register for VAT in this country. However, if you’re storing or selling goods in Germany, you’re legally required to register for VAT immediately as there is no threshold buffer for foreign businesses selling or storing goods there.
Other countries will have their own VAT regulations that you will need to comply with if you’re storing and/or selling goods there. If you fail to do so, you could find yourself facing a hefty penalty or other consequences for your business.
Amazon VAT Services
You can use Amazon VAT services in Europe which will register you with the relevant tax authorities. This means that EU VAT registration for Amazon companies make VAT for Amazons sellers really easy. This may be expensive, but once you join the vat services, they will do your VAT filing. However, they will not ensure you are compliant with VAT rules and VAT obligations. This is where we come in as we can help you with your VAT compliance so what you send to Amazon VAT services is correct.
One of the most valuable pieces of advice I can give you is to seek out the expertise of a specialist ecommerce accountant – better yet, one with experience with ecommerce merchants selling internationally. They’ll be able to ensure you’re operating compliantly when it comes to VAT and make sure that you’re doing so in the most tax-efficient way possible.
I hope you found this article helpful. If you are experiencing issues with your Amazon Seller Account and your Seller Account already received a warning or is under a review, I can assist you and help you resolve the matter.
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If you have an Amazon-related issue, feel free to join and post into my large Amazon Seller Performance – Friendly Advice – Worldwide Facebook group, where you will be very welcome.
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):
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