Amazon started as online book store and has grown to be the worlds largest online retailer.
VAT Services on Amazon officially announced
Amazon want to help small businesses succeed and to make online selling and exporting faster and easier for small businesses are officially announcing the introduction of a new service called VAT Services on Amazon.
VAT Services on Amazon is a new service from Amazon and global tax compliance solution provider Avalara, which supports small businesses with VAT registration, reporting and filing for select European countries outside of their home country. The new VAT Services on Amazon service will enable Marketplace sellers from the UK and across the EU to manage their VAT obligations.
The service covers VAT reporting obligations in France, Germany, Italy, Poland, Spain, Czech Republic and the UK. Integrated within Amazon’s Seller Central, VAT Services on Amazon supports Marketplace sellers with local VAT registration, reporting sales from Amazon Marketplace and other sales channels if necessary, as well approval and filing of relevant VAT documentation.
“Amazon is always looking at ways of improving the support offered to sellers to help them grow their business, and the launch of VAT Services on Amazon is an exciting next step to help small businesses quickly and easily sell abroad and manage VAT obligations.”
– Francois Saugier, Vice President, Seller Services, Amazon
We did write about VAT Services on Amazon a couple of months back before it was officially announced, and there’s some good news. The fee has dropped by 20% and is now €400 per year per country plus €100 per year to include your off Amazon channel transactions.
There are more and more options for VAT coming out each year and this is great for competition to drive down the price, however it is still not exactly a walk in the park, you still have to be able to provide the required data in order to get the VAT processed, and since there is no standardised formats and the reports vary between marketplaces it is no easy task.
Take CDiscount for example, you can only CSV export the last 10 days of sales, useless for VAT purposes, and their other reports do not include half of the customers information needed to decide on the VAT to be collected on a transaction.
Each marketplace is different and many countries want monthly VAT returns, so the work involved trying scrape together all the data from each channel is still a big barrier.
The software package CBV (cross boarder VAT) created by Gurpreet looks very promising as a way to resolve the issues of collecting all the transaction data, it just needs to have support for some of the channels other than the big two marketplaces which i know Gurpreet is working hard to add.
I will feel comfortable expanding sales over the thresholds once there is a standardised and automated way of collecting together and decoding my sales into the various VAT numbers that i will eventually be registered to, until then i am staying under the thresholds.
Still definately big room for improvement in this complex area of VAT.
Thanks for the shout out Kieran! Much appreciated.
As Kieran says, we have been working on Cross Border VAT to help solve this burden on small business’ over the last couple of years. Having experienced it first hand myself.
The Amazon/Avalara deal is great if you only sell on Amazon and use the Pan-European FBA scheme. However if you sell on many marketplaces, just as I do, and I know Kieran sells on 10+ different marketplaces, then getting that “offline” data each and every month is not a small task!
Our approach is simple and independent. Every month, we will be adding more and more channels, so we can automatically get the data needed to calculate your VAT returns. You can then get yourself registered, and do the filings yourself, or pay someone else to do it. The point being, you will be in control.
So far we integrate with, Amazon EU, Amazon US, all eBay, PayPal, Shopify, Stripe, with many more to come. Our system will identify duplicates, find errors, apply currency rates of your choosing, pick up FBA movements as well as the eBay Global Shipping Program and offer you a normalised and standardised excel report of all your sales at the end of every month!
Kieren is right in that there needs to be a standardised approach, however i cant see that the marketplaces will do anything so the only credible option is where you currently do you accounting.
We are VAT registered in the UK and the following Pan-EU countries – France, Germany, Italy, Poland, Spain and the Czech Republic.
We currently use KPMG to process our returns.
We use Sage accounts and we use Tradebox to import the orders into Sage from Amazon sites and ebay.
In Tradebox you can set each country with its own override VAT code so that it accounts for it correctly and with the correct rates in Sage.
I can then get a report for each country from sage and format it into the reports that KPMG require.
As they are set up in sage, when i run the UK VAT report, the orders that have had their VAT allocated to another country will appear in box 8 as they should and i do not have to make any manual adjustments.
Its good to see some competition in this area as prices for this type of service have been prohibitive, but with the price reduction for Avalara, it looks like the annual cost for the 6 pan-eu countries (You can still do UK yourself) and off Amazon sales will come in at €2,500 per year, which is a massive reduction in the “going rate”, my yearly fee for the same service with KPMG was €4,600.00.
It looks like KPMG will have to look at their figures!
A biased question from a VAT-service provider: is there any consultancy included in these fees?
Do you know that without the C79 form issued every month by HMRC you are prevented to claim import VAT?
The invoicing requirements for Germany and France? Different from the UK.
UK merchant having his French supplier shipping a parcel to a consumer client of the UK merchant in Germany: German VAT from the start. No distance selling thresholds.
So: it depends on the specific client’s needs.