I’ve written about VAT a number of times on this blog, and with good reason – it’s a topic that causes a lot of confusion for online sellers and if you get it wrong it can really destroy your business. In my opinion, registering for VAT when you don’t need to is the biggest tax mistake an eBay or Amazon seller can make!
But all that has been covered before on my blog, numerous times in fact, so what’s the point of today’s article?
Well today’s post is really a warning about Amazon’s Pan-European fulfilment service – which is a HUGE tax trap under new EU law.
As you all know, when you sell on Amazon you get access to all 5 European marketplaces:
- Amazon UK
- Amazon Germany
- Amazon France
- Amazon Italy
- Amazon Spain
And you can sell to all of these marketplaces with your one seller subscription, which is great! In fact you don’t even need to create multiple listings – you simply create your listings on your home marketplace (Amazon.co.uk for example) and if they’re eligible, they’ll “automatically be re-created in the remaining four marketplaces via Amazon’s ‘build international listings tool’.”
But Amazon have gone one step further and recently a very exciting addition to the Fulfiled by Amazon fulfilment service was introduced, called Pan-European FBA.
The idea behind it is very simple – it allows you to offer your products to all 5 European marketplaces but rather than your stock being stored and shipped from one fulfilment center (as is normally the case) – Amazon will distribute them across ALL 5 countries.
This of course provides a number of important advantages to us as sellers:
Amazon don’t charge you to distribute your stock and you don’t even have to do it yourself. You simple send your FBA items to your local Amazon fulfilment center and Amazon then spreads it around all 5 countries (plus two more) based on expected demand. [Read more…]