VAT Guides Industry-specific

Amazon Export FBA vs. Pan-European - VAT Implications

Amazon has two primary service offerings for customers who want to sell on their marketplace:

  1. Export FBA

This is where Amazon stores your goods in one of their fulfillment centres and they deliver goods on your behalf to multiple territories from this single location. 

In other words, under this model, if you are using UK FBA, your products will only be listed on Amazon.co.uk and you enable your products to be shipped to customers outside of the UK who are shopping on Amazon.co.uk. For example, if you get an order from a customer in Germany on Amazon.co.uk, the goods will be delivered from the UK to Germany. 

  1. Pan-European FBA

In this scenario, you may elect to use more than one fulfilment centre in Europe. Amazon have 7 primary locations in the EU (UK, France, Germany, Spain, Italy, Poland and Czech Republic). You can ask Amazon to store your products in two or more of these locations so that your orders can be fulfilled from here. For example, if you have customers in Germany and France, you may wish to have the goods stored locally so that the orders can be fulfilled a lot quicker. Therefore if you receive an order from a German customer, Amazon will deliver from the inventory sitting in Germany instead of the UK.

When you use the Pan-European service, you are also allowed to have your products listed on the local platforms (i.e. Amazon.de or Amazon.fr)

The VAT implications vary considerably depending on which model you use. In general, you will require a VAT registration in all countries where Amazon has a fulfilment centre, if you store your stock there and fulfil orders accordingly. The VAT reporting is also more complicated in these cases, since the movement of your inventory between Amazon fulfilment centres must be reported.

Contact VATGlobal for a complimentary assessment of your activity and proactive advice on which option is the best for your business.

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