Most Amazon Sellers In Europe Will Receive Less In Their Disbursements
From 1st August 2024, all of the fees that used to be Reverse Charge VAT will now have local VAT rates charged.
All Amazon Sellers based in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, or Sweden - especially ones using FBA - will now have local VAT rates charged to the Amazon fees which used to be 'Reverse Charge VAT'.
This means your disbursements from Amazon (usually every 2 weeks) will be less than before because you've paid VAT on things like FBA Fees.
This is happening because of services previously supplied by Amazon Services Europe S.Ã r.l. (ASE) will now be supplied by Amazon EU S.Ã r.l. (AEU).
The TL;DR of what you can do as an Amazon Seller in the above countries is:
Speak to your accountant / finance team to make sure you're ready to claim the VAT back in your normal returns.
Update your financial forecast to ensure cash flow planning is reflected.
The best time to plan for this was when it was first announced...the second best time is now.
If your brand needs support for selling on Amazon and getting the most out of the platform, check out our range of specialist services or contact us for a consulting call.
Here is an FAQ from Amazon on this topic.
Who is impacted by this change?
All sellers who have a contract with Amazon Services Europe S.Ã r.l. (ASE) as of July 31, 2024, will be impacted by this change.
If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply and VAT will be charged on your Amazon fees, where required by law. In the majority of cases, we expect that you will be able to recover this VAT through your normal VAT return process. We recommend that you contact your tax advisor for more information on recovering VAT as per your country of establishment's local regulation.
If your company is not established in the countries listed above, you will be invoiced by the AEU head office in Luxembourg, and there will be no change to how VAT is applied on Amazon fees.
Will this change my funds' disbursement amounts?
If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, and Sweden, your disbursement amounts will change after August 1, 2024. Local VAT rules will be applied to Amazon fees and VAT will be charged on your Amazon fees. If your company is established in countries other than those listed above, there will be no change to your funds' disbursement amounts. Contact your tax advisor for further guidance on this.
Will this change impact my funds' disbursement cycle or currency?
No. There will be no change to the funds' disbursement cycle or the currency that you receive funds in.
Will this change the currency in which I pay my invoices?
No. Invoice payments will continue to be deducted from disbursements in the local currency. Invoices for selling services will continue to be issued in the currency of the Amazon Stores in which you are registered on Seller Central (home country). Existing payment processes will apply for invoices settled outside of deductions from disbursements.
What details will change on my invoice?
After August 1, 2024, all invoices will be updated with applicable details for Amazon EU S.Ã r.l. (AEU), instead of Amazon Services Europe S.Ã r.l. (ASE), for the following fields:
Amazon entity name
Amazon address
Amazon VAT Registration Number (VRN)
Local VAT rate (wherever applicable)
I am a seller established in a country where AEU has a branch, how will this change impact me?
If you are a seller established in a country where AEU has a branch, starting August 1, 2024:
Your online agreements on Seller Central will be updated to reflect AEU, instead of ASE.
For the services provided by Amazon, invoices will be issued by AEU, instead of ASE.
As Amazon’s services will be invoiced by that country's AEU branch, this will result in local VAT rules being applied to Amazon’s fees, where required by law.
I'm a seller established in Luxembourg or in a country where AEU does not have a branch, how will this impact me?
If you are a seller established in Luxembourg, or in a country where AEU does not have a branch, starting August 1, 2024:
Your online agreements on Seller Central will be updated to reflect AEU, instead of ASE.
For the services provided by Amazon, invoices will be issued by AEU, instead of ASE.
There will be no change to how VAT is applied on Amazon fees compared to how you are charged today.
Where can I find changes to the Amazon Services Europe Business Solutions Agreement (BSA)?
An English version of the BSA with changes highlighted is available in the PDF . On August 1, 2024, BSA translations in German, French, Italian, Spanish, Dutch, Polish, and Swedish will be available.
I am not registered for VAT because I am under the VAT threshold. What will change for my Amazon fees starting August 1, 2024?
There will be no change. Today, you are charged VAT on your Amazon fees for all services currently supplied by Amazon Services Europe S.Ã r.l., and you will continue to be charged VAT on your Amazon fees after August 1, 2024.
My business is established in a country where AEU has a branch and I have a valid VAT registration number for that country, but I also sell in other countries. What VAT rate will be applied on my Amazon fees after August 1, 2024.
Amazon will apply the VAT rate of the country in which your business is established, provided that you have submitted a valid VAT registration number of that country in Seller Central. This applies for all sales in Amazon's EU and UK stores and all services currently supplied by Amazon Services Europe S.Ã r.l. For example, if your business is established in Germany and you have provided a valid German VAT registration number, Amazon will apply the German VAT rate on your selling on Amazon fees in Amazon's EU or UK stores.
Need support with Amazon? We're your next Amazon agency.
Contact Us
Ready to discover how we can boost your brand's online sales together? Send us a message using the contact form or schedule a free 30 minute consultation call.