VAT

VAT is used across many countries, including all EU markets and the UK.
 On Amazon, VAT impacts how sellers and vendors price, report, and remit taxes for their sales.
 It is added on top of the product’s net price, and sellers are responsible for collecting and submitting it to the relevant tax authority.

How VAT works:

• A seller lists a product with VAT included in the final price
• When a customer buys the product, VAT is collected
• The seller must periodically remit the VAT portion to the tax authority
• Sellers can often reclaim VAT on business expenses (input VAT)

VAT on Amazon applies to:

• marketplace sales by 3P sellers
• inbound and outbound B2B transactions
• FBA fulfilment fees in VAT applicable regions
• logistics services (e.g., EFN, Pan EU)
• import VAT on goods entering the EU or UK

Why VAT matters for Amazon sellers:

• Impacts pricing strategy and competitiveness
• Required for legal compliance in many marketplaces
• Affects margins, especially when selling across borders
• Needed for Pan EU, EFN, and cross border fulfilment approval
• Wrong VAT handling can lead to account suspension

Key VAT considerations for sellers:

• VAT registration in relevant countries
• Correct VAT calculation for each marketplace
• Displaying VAT invoices to customers (required in EU)
• Storing tax documentation for audits
• Using VAT services (e.g., VAT Services on Amazon)

Example:
A seller lists a product for 24 EUR in Germany.
If the VAT rate is 19 percent, the net price is 20.17 EUR and 3.83 EUR is VAT to be remitted.

Why It Matters:
VAT compliance ensures sellers can trade legally, avoid penalties, and use Amazon’s full cross border fulfilment network.

In short:
VAT (Value Added Tax) is a consumption tax included in product prices and paid by the customer, which sellers must collect and remit according to local laws.