Amazon is a driving force in e-commerce and now have over 40 fulfilment centre’s across the UK & Europe and are constantly expanding. Amazons PAN European FBA program allows sellers to take advantage of these locations to deliver millions of goods to consumers at a price that is affordable but it does come with some VAT obligation you need to be aware of
The Amazon PAN-EU FBA program is a popular scheme for amazon sellers, the scheme allows sellers to drastically reduce their fulfilment fee’s for orders shipped within the EU, allows sellers to benefit from Amazon Prime and ship faster to EU customers but all of these benefits don’t come without consequences. Many sellers neglect their VAT obligations when using schemes such as the Amazon Pan European program which leave them in a tricky spot with the tax office and occasionally result in their Amazon account to be suspended.
The tax offices in Europe now work closely with Amazon to combat VAT fraud so it can be detrimental to your business if you get suspended from Amazon and are unable to transact sales on the platform. The Amazon Pan European program triggers certain VAT obligations you need to be aware of and should have in place before you enrol in the program.
The PAN-EU program prior to Brexit allowed sellers to ship their goods to one Amazon FBA centre, usually in their local country. The goods would then be automatically distributed by Amazon to the 7 FBA warehouses located in Germany, Poland, Czech Republic, France, Italy, Spain and the UK so that the goods were closer to your buyers and delivered faster. Due to this movement it was considered that the seller who enrolled in the program was storing goods locally in each of these countries which created a VAT obligation and the need to register for a VAT number in each of the 7 countries. Due to Brexit the UK Movement is no longer part of the scheme and is part of the separate FBA location.
Amazon have plans to include Netherlands and Sweden in their programs later this year, they have already opened up fulfilment centre’s in these countries.
How to get started with Pan European
1. Create an Amazon selling partner account and add your products to FBA. 1 account allows you to access 5 marketplaces. UK, FR, IT, DE and ES.
2. Confirm which products are eligible for Pan-European FBA. If you can sell a product on all of the Amazon EU marketplaces then it is likely to be eligible for the scheme.
3. Create ASINs for your products and match them to already existing Amazon products or if your product is unique create a new ASIN listing for it
4. Enable Pan-European FBA – to enable Pan-EU FBA you must be eligible to sell in all 5 European marketplaces, go to your Fulfilment by Amazon settings in Seller Central
5. Create your FBA offers using the same fulfilment network SKU across all marketplaces. The FNSKU is an ID that Amazon uses to identify a unique product and associated seller when sent to an Amazon fulfilment center. You must create an active FBA offer for each item in each of the five marketplaces from the same inventory with indentical labelling types (i.e., inventory cannot be labelled in one marketplace and stickerless in another.
6. You must enrol each new product in the Pan-European FBA program from your inventory page to start receiving the benefits of the scheme
7. Now your ready to ship the stock, send your Pan-European FBA ASINs to the Amazon European Fulfilment center(s) in the country of your choice. The UK warehouses can no longer be an option to fulfil to the rest of Europe, Once your stock arrives in the fulfilment centre Amazon will complete all stock movements across their European warehouses to position your goods closer to the right buyers and increase sales.
8. Now sit back, relax and watch your goods sell. It’s worthwhile to take advantage of the reporting tools made available in seller central
VAT Obligation of Amazon’s Pan European FBA Scheme
Activating the Pan European FBA scheme doesn’t trigger a VAT obligation at this point, The obligation becomes active on the first date you move your goods to the European Fulfilment centre. Storing goods in a country is a common trigger for VAT registration and you should look to register in a country before you make your first taxable activity. As amazon will move your goods between 6 different countries you will need to register for VAT and carry out filing obligations in France, Germany, Czech Republic, Italy, Spain and Poland.
Contact our team to discuss your requirements and how we can help you register and fulfil your obligations as part of the pan-eu scheme. VAT Digital deal with 100’s of Amazon sellers on a daily basis.