Amazon Announces Crucial Updates to UK and EU Agreements and VAT Treatment
Key Changes to Take Effect from August 1, 2024
By Staff Writer
Amazon, the global e-commerce giant, has recently announced significant updates to its Selling on Amazon, Fulfilment by Amazon, and other services for sellers in the UK and EU. In an official update posted on Seller Central, the company revealed that starting from August 1, 2024, these services will be supplied by Amazon EU S.à r.l. (AEU) instead of the current provider, Amazon Services Europe S.à r.l. (ASE).
Updates to Agreements and Policies
As part of this transition, all existing agreements, policies, terms, and conditions that currently refer to ASE, including Amazon Payments agreements, will be updated to reflect AEU as the new service provider. This change aims to streamline Amazon's operations and provide a more efficient service to its sellers.
Also Read: What is Amazon's A-to-Z Guarantee? All You Need to Know About Returns, Refunds, and More
VAT Treatment Changes for Sellers
The update also brings changes to the VAT treatment for sellers based in specific European countries. According to Amazon, "If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply, and VAT will be deducted from Amazon fees."
Amazon expects that, in most cases, sellers will be able to recover this VAT through their standard VAT return process. However, the company recommends that sellers consult their tax advisors for more information on recovering VAT in accordance with their country's local regulations.
For sellers whose companies are not established in the countries mentioned above, invoicing will be handled by the AEU head office in Luxembourg, and there will be no changes to how VAT is applied to Amazon fees.
Seller Reactions
The new updates have sparked a variety of reactions from sellers on Amazon Seller Central. One seller questioned, "What impact does this policy have on us? Do you need to withhold VAT on every order placed by Amazon registered by local companies (UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, and Sweden)?"
Another seller raised concerns about the flat rate scheme, asking, "Hello, Could you please clarify what happens if you are on the flat rate scheme? On the flat rate scheme, you cannot re-claim VAT, so it would not be right for Amazon to take the 20% as the sellers cannot reclaim the difference from HMRC. I am assuming Amazon will have a filter for flat rate companies where we can input our rate? Say, 7.5%."
Additionally, a seller sought clarity on international implications, wondering, "Does anyone know what happens if you also sell on Amazon US from your UK Ltd company? Will VAT fees be added back there?"
No Impact on Account Access or Selling Services
Amazon has reassured sellers that this change will not impact their account access, listings, product pricing, customer reviews, selling services, or the price of services. The company has provided a dedicated page on its website with more information about the update to help sellers navigate the changes seamlessly.
In conclusion, the new update by Amazon marks a significant shift in how services are supplied and invoiced in the UK and EU. By transitioning from ASE to AEU, Amazon aims to streamline its operations and ensure compliance with local VAT regulations. Sellers are encouraged to consult their tax advisors to navigate these changes effectively and continue their business with minimal disruption.
For more information, visit Amazon UK and EU seller services entity and VAT treatment.
Also Read: Free and Easy: Returning Amazon Products Just Got Simpler
Follow us on Facebook, X and LinkedIn to get the latest news and updates related to online selling.
By Staff Writer
Amazon, the global e-commerce giant, has recently announced significant updates to its Selling on Amazon, Fulfilment by Amazon, and other services for sellers in the UK and EU. In an official update posted on Seller Central, the company revealed that starting from August 1, 2024, these services will be supplied by Amazon EU S.à r.l. (AEU) instead of the current provider, Amazon Services Europe S.à r.l. (ASE).
Updates to Agreements and Policies
As part of this transition, all existing agreements, policies, terms, and conditions that currently refer to ASE, including Amazon Payments agreements, will be updated to reflect AEU as the new service provider. This change aims to streamline Amazon's operations and provide a more efficient service to its sellers.
Also Read: What is Amazon's A-to-Z Guarantee? All You Need to Know About Returns, Refunds, and More
VAT Treatment Changes for Sellers
The update also brings changes to the VAT treatment for sellers based in specific European countries. According to Amazon, "If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply, and VAT will be deducted from Amazon fees."
Amazon expects that, in most cases, sellers will be able to recover this VAT through their standard VAT return process. However, the company recommends that sellers consult their tax advisors for more information on recovering VAT in accordance with their country's local regulations.
For sellers whose companies are not established in the countries mentioned above, invoicing will be handled by the AEU head office in Luxembourg, and there will be no changes to how VAT is applied to Amazon fees.
Seller Reactions
The new updates have sparked a variety of reactions from sellers on Amazon Seller Central. One seller questioned, "What impact does this policy have on us? Do you need to withhold VAT on every order placed by Amazon registered by local companies (UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, and Sweden)?"
Another seller raised concerns about the flat rate scheme, asking, "Hello, Could you please clarify what happens if you are on the flat rate scheme? On the flat rate scheme, you cannot re-claim VAT, so it would not be right for Amazon to take the 20% as the sellers cannot reclaim the difference from HMRC. I am assuming Amazon will have a filter for flat rate companies where we can input our rate? Say, 7.5%."
Additionally, a seller sought clarity on international implications, wondering, "Does anyone know what happens if you also sell on Amazon US from your UK Ltd company? Will VAT fees be added back there?"
No Impact on Account Access or Selling Services
Amazon has reassured sellers that this change will not impact their account access, listings, product pricing, customer reviews, selling services, or the price of services. The company has provided a dedicated page on its website with more information about the update to help sellers navigate the changes seamlessly.
In conclusion, the new update by Amazon marks a significant shift in how services are supplied and invoiced in the UK and EU. By transitioning from ASE to AEU, Amazon aims to streamline its operations and ensure compliance with local VAT regulations. Sellers are encouraged to consult their tax advisors to navigate these changes effectively and continue their business with minimal disruption.
For more information, visit Amazon UK and EU seller services entity and VAT treatment.
Also Read: Free and Easy: Returning Amazon Products Just Got Simpler
Follow us on Facebook, X and LinkedIn to get the latest news and updates related to online selling.
Disclaimer:
Amazon is the registered trademark of the e-commerce brand.
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ChannelMAX offers Amazon Repricer that runs on the latest AI Repricing algorithm to do Amazon Pricing Management or Amazon Repricing. Based on Amazon SP API, the repricing engine or repricer runs 24/7 and efficiently manages Amazon prices to maximize your BuyBox with profit optimization. Established in 2005, ChannelMAX has been integrated with Amazon technology since 2007, helping thousands of third-party sellers on various eCommerce platforms. Some of the eCommerce platforms, aka marketplaces, supported by ChannelMAX.NET, are Amazon, Walmart, eBay, and Shopify. Some of ChannelMAX key offerings include ChannelMAX Amazon Repricer, 2ndly, ChannelMAX Amazon FBA Audits and FBA Refunds management, an offering for managing Amazon FBA Refunds Reimbursement management for lost or damaged or misplaced inventory for which Amazon is responsible and for which sellers deserve appropriate credit reimbursement from Amazon. ChannelMAX Services offer Remote (aka Virtual) Full-Time eCommerce Assistant to help 3P sellers run their daytoday business.
Check ChannelMAX at Amazon Selling Partner Appstore, an application with a 5 star rating.
Amazon is the registered trademark of the e-commerce brand.
About ChannelMAX.NET:
ChannelMAX offers Amazon Repricer that runs on the latest AI Repricing algorithm to do Amazon Pricing Management or Amazon Repricing. Based on Amazon SP API, the repricing engine or repricer runs 24/7 and efficiently manages Amazon prices to maximize your BuyBox with profit optimization. Established in 2005, ChannelMAX has been integrated with Amazon technology since 2007, helping thousands of third-party sellers on various eCommerce platforms. Some of the eCommerce platforms, aka marketplaces, supported by ChannelMAX.NET, are Amazon, Walmart, eBay, and Shopify. Some of ChannelMAX key offerings include ChannelMAX Amazon Repricer, 2ndly, ChannelMAX Amazon FBA Audits and FBA Refunds management, an offering for managing Amazon FBA Refunds Reimbursement management for lost or damaged or misplaced inventory for which Amazon is responsible and for which sellers deserve appropriate credit reimbursement from Amazon. ChannelMAX Services offer Remote (aka Virtual) Full-Time eCommerce Assistant to help 3P sellers run their daytoday business.
Check ChannelMAX at Amazon Selling Partner Appstore, an application with a 5 star rating.