{"id":2492,"date":"2017-08-23T16:20:15","date_gmt":"2017-08-23T16:20:15","guid":{"rendered":"https:\/\/brightpearl20.wpengine.com\/selling-on-amazon-a-retailers-guide-to-european-vat\/"},"modified":"2025-01-29T19:27:11","modified_gmt":"2025-01-29T19:27:11","slug":"selling-on-amazon-a-retailers-guide-to-european-vat","status":"publish","type":"post","link":"https:\/\/www.brightpearl.com\/blog\/selling-on-amazon-a-retailers-guide-to-european-vat","title":{"rendered":"Selling on Amazon: A Retailer’s Guide to European VAT"},"content":{"rendered":"

In the modern age of ecommerce, the world is your customer. Whether you sell that must have fashion accessory or an exciting niche product, selling online gives you the opportunity to get your goods out to millions of customers and not just on the high street. However, when selling to online shoppers via marketplaces like Amazon<\/a>, you will face a new level of complexity that you should be aware of.<\/span><\/p>\n

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European VAT<\/span><\/strong><\/h3>\n

Across the EU, there are 28 sets of Value Added Tax (VAT) interpretations of the same tax system. Each of these have different tax rates, frequencies of filing and reporting, product rates (i.e. what\u2019s taxable in one country may not be in another, or may have a different rate) and they have different methods of collecting VAT. All of these variations can lead to an unexpected headache if you\u2019re aiming to sell across Europe, and especially so if you need to file in multiple countries.<\/span><\/p>\n

Online sales in <\/span>Western Europe <\/span><\/a>and Poland grew from \u00a3174.76 bn [\u20ac201.33 bn] in 2015, to \u00a3201.90 bn [\u20ac232.60 bn] in 2016 – an increase of 15.6%. And in 2017, it\u2019s expected the total ecommerce online sales will increase to \u00a3230.62 bn [\u20ac265.68 bn], a rise of 14.2%, <\/span>covering about <\/span>two thirds of users shopping online in 2016<\/span><\/a>. While selling across Europe presents a massive opportunity<\/span>, there are pitfalls. <\/span><\/p>\n

These pitfalls are particularly around cross border sales, stock holding and <\/span>VAT thresholds<\/span><\/a>. Unfortunately, ignorance of the law and legislation is not a defence and if you exceed these thresholds and rules, they will find you liable. Thus, the ability to go under the radar is decreasing. <\/span><\/p>\n

All EU countries are now actively looking at cross country selling and electronic sellers. They are sharing data with each other as well as actively approaching marketplaces, such as eBay for more seller data. In fact, <\/span>Amazon<\/span> are handing this data over now as well as eBay and <\/span>Etsy<\/span><\/a>. And the consequences could be hard on your business’ pocket if you’re not reporting on tax correctly.<\/span><\/p>\n

As time goes on, marketplaces are getting more accurate and have dedicated teams occupied with making sure they get all the tax they are owed. There was an estimated <\/span>\u20ac160 billion lost in revenue across the EU in 2014<\/span><\/a>, with at least <\/span>\u00a31.5 billion estimated lost from overseas online sales in 2016 alone <\/span><\/a>from undeclared or evaded VAT in the UK. For governments all over Europe, it is in their interest to make sure they get as much of the tax they are owed as they can. No matter where your business resides.<\/span><\/p>\n

Amazon are actively looking at expanding across Europe and bringing their customers with them, ensuring what the customer wants is easily and more readily available. As an Amazon seller, this gives you a massive opportunity: a wider audience to make your mark with and help with expanding into a larger overseas market. But it also means you need to be ready and able to report on tax correctly.<\/span><\/p>\n

Selling on Amazon Europe<\/strong><\/h3>\n

Amazon Europe has 5 marketplaces:<\/span><\/p>\n