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How do Amazon sellers declare VAT value added tax?

2021-03-25 544
How do Amazon sellers declare VAT? 1. What the hell is VAT?

1. VAT

Namely Value Added Tax/ AD VALOREM tax, additional tax, a tax system of the European Union, also called value-added tax. If your product is shipped using a local storage in the UK, it belongs to the scope of VAT payable in the UK. We recommend that you register your VAT number and declare and pay taxes as soon as possible in order to legally use the local storage in the UK for delivery and sales.


That is the abbreviation of Economic Operator Registration and Identification. This number is a necessary registration number for all economic activities in EU countries, especially for enterprises with import and export business. As long as the number is registered in the customs of the country where the company belongs, it will be used throughout the European Union. The usual format of EORI number is: GB+VAT number+000, which is used when entering customs.

3. Tariffs, import value-added tax, sales value-added tax

After the import to complete the transaction, there are three taxes related to the seller, namely customs duty, import value-added tax, and sales value-added tax.

(1) When goods are imported into the UK, the money to be collected by customs tax is called import tax, import tax = tariff + import value-added tax

(2) After the online transaction is completed, the tax bureau will have to settle the account with you. At this time, they will refund the import value-added tax you have paid, and let you pay the sales tax based on the sales.

4. What is the value-added tax rate of VAT?

There are three tax rates for VAT

20% standard tax rate (applicable to most goods and services)

Low tax rate of 5% (such as household electricity or natural gas, etc.)

0% tax rate (applicable to very rare cases)

The historical cumulative sales of less than £230,000 can apply for the FLAT RATE preferential tax rate of 7.5%.

5. Under what circumstances need to pay UK VAT?

The goods are already in the UK at the time of sale, and the goods are not imported into the UK by the British buyer. That is: merchants who use UK warehousing services (Amazon FBA, third-party overseas warehouses) must pay VAT in accordance with the law.

The same goes for Germany.

2. How should the seller declare VAT when clearing old accounts/verification 0 declaration?

1. Settle old accounts

Amazon sellers need to pay attention to the following after registering for UK VAT:

If your seller account is a new VAT with the new account, you can declare tax on time every quarter.

If it is an old Amazon account that has been in operation for a long time, the sales before the binding of VAT require tax reimbursement, and a questionnaire with dozens of questions is attached.

2. Check 0 to declare the seller

Some sellers have sales income, but the declaration is 0 declaration. When the tax bureau checks 0 declaration companies, once they find that there is a business on the platform but 0 declaration, they will impose different levels of fines and tax assessments.

3. How do sellers declare

How do Amazon sellers declare VAT value added tax?

After applying for VAT registration, even if there is no sales, you need to make a regular tax declaration every quarter. You can choose to declare on your behalf or declare on your own;

There is no sales, but there is import customs clearance and import tax bills in the current period, and non-zero declarations are made, and there is a tax refund.

If there is no sales, there is no import customs clearance in the current period, and 0 declaration is made.

There is sales, and there is import customs clearance and import tax bills in the current period. If non-zero declaration is made, the import tax bills can be deducted. For purchases and sales, there is a tax refund; for purchases and sales, the excess sales tax needs to be paid and deducted.

If there is sales, there is no import customs clearance in the current period, or there is import customs clearance, but no import tax bill is generated, a zero declaration is required and sales tax is paid.

If you need to pay a certain tax after the declaration, you must pay the tax within 7 working days after the declaration receipt is issued. If the tax is delayed, HMRC will calculate the interest daily at 3% of the current tax amount from the delayed date, and after 30 days HMRC will produce a court letter, and the taxpayer will be prosecuted if the consequences are serious. (Note that European accountants are jointly and severally liable. Don't believe in anything that can absolutely do zero tax returns for you. Generally, zero tax returns are only a possibility, but generally not zero returns)

3. Ignore the hidden dangers behind the importance of VAT

If a small partner does not use his own VAT number when exporting goods, on the one hand, he will not be able to enjoy the import VAT refund; on the other hand, if it is found that the borrowing of another person’s VAT or the VAT number is invalid, the goods may be deducted and cannot be cleared. In addition, if a valid VAT invoice is not provided to overseas customers, it does not rule out the possibility of the other party canceling the transaction.

If a small partner shares a VAT tax number with multiple platform accounts, there is a risk of being associated with a store closure. If the freight forwarder’s VAT tax number is borrowed, if the VAT for the first customs clearance is different from the VAT linked to the customer’s sales platform, the VAT tax paid for the first customs clearance will not be deductible during the VAT output tax declaration link, even if the current sales tax The amount of VAT paid for imports cannot be refunded.
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