Value added tax (VAT) is charged on most sales to consumers in Europe, and the rules for online marketplaces changed significantly in July 2021 with the EU’s e-commerce VAT package. This guide gives an overview of the situations Amazon sellers meet most often. It is not tax advice: your obligations depend on where your business is established, where your stock is and who you sell to, so confirm your setup with a tax adviser.
Three questions that decide your VAT obligations
- Where is your business established? In the EU, in the UK, or elsewhere, for example the US.
- Where is your stock? Shipped from outside the EU, stored in one EU country, or stored in several.
- Who are your customers? Consumers (B2C) or businesses (B2B).
Storing stock means registering
As a rule, if your goods are stored in an EU country and sold from there, you need a VAT registration in that country. This is the most important point for Amazon sellers, because FBA programmes decide where your stock sits:
- Stock in one country only, for example Germany: one local registration, plus the rules below for cross-border sales.
- Stock spread across several countries, for example through Pan-European FBA: a registration in each country where stock is held.
Amazon asks for valid VAT numbers for the countries where it stores your inventory.
The One-Stop Shop (OSS)
When you sell goods from one EU country to consumers in other EU countries, VAT is generally due in the customer’s country. The One-Stop Shop means you do not have to register in each of those countries for these sales. Instead, you declare them in a single quarterly OSS return in one member state.
Two limits are worth knowing:
- OSS covers cross-border sales to consumers. It does not cover sales of goods stored in the customer’s own country; those still need a local registration and return.
- A low EU-wide threshold applies to small EU-established businesses. Most growing brands are above it quickly.
When the marketplace is treated as the seller
Since July 2021, a marketplace like Amazon is treated as the seller for VAT purposes in certain situations. The two that matter most:
- Sales of goods already in the EU by sellers established outside the EU to EU consumers.
- Low-value goods imported from outside the EU in consignments up to €150.
In these cases Amazon charges and pays the VAT on the sale to the consumer. That does not mean a non-EU seller has no VAT obligations: importing goods, moving stock and other transactions can still require registrations and returns. This is the area where advice for your exact setup pays for itself.
The United Kingdom
The UK has its own VAT system outside the EU rules. Sellers storing goods in the UK need a UK VAT registration, and online marketplaces collect VAT on many sales by overseas sellers. Treat the UK as a separate project from the EU.
A practical order of work
- Decide which marketplaces you will sell in and where your stock will be stored.
- Ask a tax adviser which registrations that plan requires, including OSS.
- Register before your stock arrives, not after.
- Enter the VAT numbers in Seller Central and set up the VAT calculation and invoicing settings.
- Keep the reports Amazon provides for each period; your adviser will need them for the returns.
VAT is one of three regulatory topics to settle before launching in Europe, together with packaging EPR and GPSR. If setting up European registrations yourself is not the route you want, see our Merchant of Record service.