How you set-up your European Amazon Account and FBA, whether it’s Pan-European, European Fulfilment Network (EFN) or Multi-Country Inventory (MCI) will dictate if you need one, two …six or more VAT numbers.
Many times we’ve seen Amazon Sellers all too eager to set-up their European Amazon Sellers Account with little regard of long-term sales strategies. Like many things, it’s not simply a click of a mouse to change your Amazon selling and FBA status in Europe.
When preparing to sell via Fulfilment by Amazon (FBA) in Europe, it’s very important to look at your long-term sales goals.
Immediately you need to consider the VAT implications of doing business in Europe, as well as its costs. This helps sellers to understand what services they can afford and potentially how they’ll set-up their Amazon account structure in Europe including: sales, prices, logistics, etc.
Two things to note straight away about VAT in Europe is that you must register for VAT in any European Union country you store your goods, including the UK and in some cases, if you are not an EU-based business, you’ll need a VAT service that can act as your fiscal representative as required by some EU countries.
When setting up you Amazon Sellers Account in Europe, you’ll need to know how many EU countries you plan to sell your products, where you’ll be storing your goods and if you plan to expand sales into neighbouring EU countries in the future.
The Pan-European FBA programme allows you to sell across the entire European market while Amazon stores you products in multiple Amazon fulfilment centres across Europe.
The benefits of this programme is that your products are eligible for Amazon Prime across Europe and your customers will enjoy the fastest possible delivery times, while you’ll be paying the lowest fulfilment fees offered by Amazon in Europe.
VAT implications are you’ll need to register in six to seven EU countries because Amazon may store your products in a number of its EU-based fulfilment centres, all in different countries across Europe. You’ll also need to be registered in the EU’s One-Stop Shop VAT scheme, enable authorities to collect VAT on sales in sales in European countries in which you’re not VAT registered.
Multi-Country Inventory (MCI)
With the Multi-Country Inventory programme you can choose which of Amazon’s fulfilment centres you wish to store your products in Europe, up to five locations.
The benefits of this programme is that your products are still Prime eligible like with the Pan-European FBA programme, but you’ll choose the fulfilment centres and can add additional centres as your sales grow. You’ll even save on cross-border EFN fees in the countries you store your products. Amazon allows sellers to choose from two to five EU fulfilment centres for this FBA programme.
VAT implications are you’ll need to register in the countries you chose to store your products with Amazon’s EU-based fulfilment centres, that could be as few as two or up to five. You’ll also need to be registered in the EU’s One-Stop Shop VAT scheme in order to collect VAT on sales in European countries in which you’re not VAT registered but sell your products.
European Fulfilment Network (EFN)
The European Fulfilment Network allows you to select just one of Amazon’s fulfilment centres enable you to store your products in a single EU-based country but able to sell across all of Europe.
Benefits of this programme are your products are Prime eligible for fast delivery and you’ll only have to ship and store your products to one Amazon fulfilment centre of your choosing. One small drawback is cross-border EFN fees apply for orders to any of Amazon’s other European marketplaces.
VAT implications are minimal. You’ll need to be VAT registered in the EU country where you’re storing your products, your selected Amazon fulfilment centre. You’ll also need to be registered in the EU’s One-Stop Shop VAT scheme which covers sales in all other European countries.
As you can see, Amazon has created three programmes to benefit the seller and customer alike. However, knowing your VAT implications can help you better choose the best FBA programmes for your business while knowing the costs associated with your decision.
Please feel free to contact our VAT compliance team on 44 (0) 208-004-1160 in the UK, ++1 (714) 782-7000 in the USA or simply email us at query@MyVATdirect.com to answer any of your questions and how we may be able to help.
About My VAT Direct Ltd
My VAT Direct is a bespoke VAT registration, fiscal representation, calculation and filing service specifically designed to assist Amazon Sellers and e-commerce merchants who desire the benefits of cross-market selling without the worry of tax compliance in foreign markets.
My VAT Direct is comprised of knowledgeable and experienced tax experts, who for 10+ years, have helped e-commerce sellers enjoy the selling opportunities a mass market can provide.
About SMBE Direct Ltd
My VAT Direct is a subsidiary of SMBE Direct, a world reaching B2B and B2C business services conglomerate, giving rise to exceptionally talented and well-experienced professionals organised into business units, that provide direct services to SMEs and enterprise level businesses, whereby increasing their brand awareness and sales.