VAT Compliance for ecommerce Traders

Ecommerce is booming, so it’s not surprising that more and more people are setting up online businesses. Amazon is the market leader and offers traders three different fulfilment options — known as fulfilment by Amazon (FBA).

Deciding which one is right for your online business depends on a number of factors, so here is a guide from the experts at VATINT.

Central European Programme (CE)

When your ecommerce business gets bigger, you may want to move up to the Central European Programme (CE) which allows you to store goods in three different countries (Germany, Poland and the Czech Republic).

There are no additional FBA fees to use this service, in fact the fulfilment fees per unit are slightly lower, while delivery times will be improved. The major drawback of the CE programme is that your business will need to be VAT registered in Germany, Poland and the Czech Republic. 

European Fulfilment Network (EFN)

Designed for Amazon beginners, EFN allows you to store goods in one country, meaning you only need one VAT number. This allows you to fulfil orders from the rest of Europe from one site and one account, making your job much easier.

In order to store your products at your local Amazon warehouse, traders need to hold an Amazon European Marketplaces Account and be FBA registered.

The main benefit of EFN is it makes the trader’s job simpler, while charging low fulfilment costs. However, because your goods are stored in one country, delivery times will be longer to the rest of Europe.

Amazon PAN-European

If you are on course to becoming an Amazon super-seller, you will need the PAN-European programme which allows traders to sell goods across the EU more efficiently with faster deliveries and lower fees.

Simply get your goods delivered to your local warehouse, and Amazon will do the rest by shipping products across its European network according to demand. You will also get the opportunity use the Amazon Prime service, giving you access to millions of loyal buyers and the highest level of customer service.

Because products are stored in local fulfilment centres, traders will be charged local fees with no cross-border surcharge.

The PAN- European is designed for traders who sell at least 1,500 units per month. Like the CE programme, you must be VAT registered in Germany, Poland and the Czech Republic, meaning more regulations and paperwork.

Which Amazon programme is best?

Choosing the best Amazon FBA solution depends mainly on the size of your business and your target market. The ecommerce experts at VATINT and Parker Russell can advise you on the best route to market.

For example, EFN is perfect for those with sales of less than 500 units per month, while the CE programme is the preferred choice up to 1,500 units per month. If your business takes off and your sales exceed this level, then you will need to move up to the PAN-European level.

How do I become an Amazon seller?

Many people think that selling online is easy, and they start trading without researching the market or they fail to set up their business correctly.

The ecommerce experts at VATINT and Parker Russell will be with you every step of the way, advising you on the tax and company requirements of doing business across Europe.

We can help you move up the programmes, guiding you through the necessary administrative duties and VAT compliance, saving you time so you can get on with building your business. We can register you for VAT overseas and keep a track of your sales and the relevant VAT thresholds in each EU state.

By being an organised and professional Amazon seller, you can: 

We can help

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