Amazon and German tax/VAT

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Uninspiring reason! German tax.

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By Duncan Barraclough
2nd October 2019

This morning many Amazon brands and sellers checked their inbox, and many received a rude awakening. Included in this morning’s inbox refresh was one notable email from Amazon, announcing to many that their Amazon selling accounts for Germany were now blocked. In order to unblock, there is a requirement to either provide a German tax certificate, or agree a declaration of non-requirement for said certification.

The reason? Since January 2019, Amazon had quietly been drip-feeding the requirement, enforceable from 1 October 2019, that sellers needed to do something about their VAT status for Germany. There’s no need to go into the ins and outs of German tax law, as, if there’s any desire to dull the senses, there is already plenty of material readily and publicly available on Brexit which would guarantee the glazing over of the most glassy of eyes. The essential why, however, of the German VAT question, is that Amazon want sellers to take responsibility for their own VAT status so that Amazon doesn’t have to.

That’s fair enough, all told, but it does represent an additional hurdle or two to overcome. This applies to sellers who are shipping to customers directly, sellers who use Amazon to dispatch with Amazon Prime (FBA /Fulfillment By Amazon) and also sellers who qualify to provide Prime shipping directly (Seller Fulfilled Prime).

Amazon has flagged some sellers which it feels this VAT requirement may be relevant for – generally, these are sellers who either have generated some sales in Germany via amazon.de or via Amazon pan-European FBA. However, if you haven’t heard anything from Amazon about German tax or VAT lately, it’s worth checking the criteria below to make sure it doesn’t apply right now.

Generally sellers on Amazon will fall into two camps here:

Camp #1

I don’t need a German tax certificate

  • I don’t store any stock in any German warehouse or facility and
  • I don’t generate over 100,000 Euro of sales in Germany in a calendar year.
  • If this is the case, simply declare you don’t need a certificate in order to comply with Amazon requirements (I can help with this if needed). If you have zero German sales, this step isn’t even needed.

Camp #2

I need a German tax certificate

  • I have stock held in a warehouse or facility in Germany, and I am shipping products to German households or businesses and/or
  • I am generating over 100,000 Euro of sales in Germany in a calendar year.
  • If this is the case, there are two options – sign up for Amazon’s VAT Service (free for Year 1) and they will help take care of this requirement (takes circa 4 weeks), or, alternatively, go via the German Tax Office and obtain a certificate (takes circa 6 weeks). I can help with this if needed.

For most sellers, it boils down to how much turnover for Germany you’re making, and if you hold stock in Germany currently.

Tax is tedious at the best of times, but what makes this microscopically more interesting is that there is a grey area. The grey area here exists in the situation where Amazon is transporting stock around Europe as part of its pan-European FBA, which is a common scenario particularly when sellers have opted into the pan-European FBA initiative. There has not been a straight answer which indicates one way or the other if this in itself requires a German tax certificate to satisfy Amazon’s compliance requirements. The rule of thumb is that if you have stock stored in Germany for a period of time it’s prudent to obtain the tax certificate. We are not privy to what Amazon have agreed in order to appease the BZSt, the German Federal Tax Office. What is clear however is that you will fall into one of the camps above and that should direct your action regarding German tax compliance with Amazon as of 1 October 2019. If still in doubt, do consult your accountant.

For further reading, see Amazon’s VAT resource centre https://services.amazon.co.uk/services/vat-resources.html

The German Federal Tax Office (BZSt) also contains some information, but you’d be forgiven for thinking you’d stumbled onto a Mercedes dealership’s website https://www.bzst.de/EN/Home/home_node.html

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