Selling on Amazon and not based in the EU?
Online retailers based outside of the EU who are using Fulfilment by Amazon (‘FBA’) face differing obligations to those resident within one of the 28 states of the European Union. The good news is that they can still sell to consumers without forming a company in the EU, but they will still need to register for VAT in the countries where they are selling.
The exact requirements for non-EU FBA retailer depend on where the goods are being dispatched from when a customer makes an online order.
Goods outside of the EU
If the goods are held at the non-EU seller’s location, then the goods have to first clear through EU customs. The seller can do this when the goods arrive at an EU country for the first time. They can pay the import VAT and customs duty to bring the goods into the EU for onward delivery to their customer. If the seller wants to reclaim the import VAT, then they must VAT register in the country where the goods are being cleared. Otherwise, the seller must absorb the import VAT as a cost, as well as the import duty.
Alternatively, the non-EU seller can force their customer to settle the import VAT and customs duty. Typically the delivery agent will charge the customer this amount before they hand over the goods. Whilst simple, this does often deter customers from repeat business with sellers.
Goods inside the EU
If a non-EU seller want to hold stocks of goods in the EU at an Amazon warehouse, this will require a VAT registration in the country of the warehouse. The seller can then use this number to sell the goods to EU consumers. Once the seller exceeds the distance selling thresholds, they will have to register in more EU countries.
- Fulfilment by Amazon - EU VAT
- Distance selling EU VAT thresholds
- 2015 EU VAT changes to electronic B2C services
- Internet and ecommerce VAT
- Non-EU companies VAT on electronic services, books, video, App's and software