Every business person understands that adhering to taxation policies is mandatory. This applies to amazon seller businesses as well. It is therefore vital for you as a business owner on Amazon to know when you need to register for VAT in the EU. Taxation is a huge part of the business because it affects the profits of the business directly.
For you to know if your Amazon seller business is required to register for VAT in the EU, there are factors that should guide you as to whether you need to pay VAT in the first place. The country your business was established will determine where you need to register for VAT. The location of your inventory, as well as the number of sales, will determine whether you need to pay for VAT.
Indicators That You Need to Register Your Amazon Seller Business for VAT in the EU
1. If you have reached the distance selling threshold of the country, if your Amazon seller business sells goods worth 35,000 Euros (sometimes higher/lower for certain EU countries) and above, then you need to register for VAT in one of the EU countries in which you sell your commodities. However, if you sell below this threshold, you do not need to worry about VAT.
2. If your business is a supplier with Amazon within the EU; if your business supplies goods or services in any of the EU countries, you need to register for VAT in the EU. Amazon seller businesses outside the EU do not need to register for VAT in the EU.
3. Amazon seller businesses that offer Amazon fulfilment services in any of the EU countries also need to register for VAT in the EU. If your Amazon seller business checks this box, you are most likely required to register for VAT in the EU.
4. If your business engages in the import and export of goods to or from the EU, you will need to register for VAT in the EU. Registering and paying the VAT will ensure you do not get into trouble with the tax authorities in the course of your business.
Steps You Can Take to Ensure You Register and Pay for VAT as Required in the EU
1. Get expert tax advice to understand your VAT obligations early enough; as an Amazon seller business, you cannot be a jack of all trades. You will need professional help when it comes to fulfilling your tax and VAT obligations. It is good that you hire a professional from the word go so that you do not rush to meet the strict VAT deadlines imposed on businesses.
2. Strategise, before launching your business; before you start selling goods in the EU through your Amazon seller business, make sure you research your VAT obligations. This will guide you on how to price your goods because VAT directly affects your revenues and profits.
3. Outsource filing tax services. For you to focus and be effective in your amazon seller business, you will need to hire a tax expert to help you with the filing of taxes. Filing taxes can be a lengthy and complicated procedure that could cost you more money if done wrongly or late. This is why you will need a professional to help you with the filing of VAT.
Common Mistakes You Must Not Make When Dealing With VAT in the EU.
Avoid trying to figure out VAT on your own, unless you are a tax expert. Many amazon seller business owners end up being fined huge amounts of money because of not following VAT regulations. Hiring an expert will help you avoid such fines.
You also need to avoid asking your general accountant about VAT. Most general accountants do not have specialised knowledge to deal with VAT. You must look for a tax expert specifically because they will help you with your VAT more than your accountant can.
Hiring a VAT expert who does not understand Amazon is another crucial mistake you must not make. You must make sure you hire an expert with vast experience in Amazon because they are aware of all the tax requirements on Amazon.
Ignoring or delaying your VAT registration will cost your business a lot of money in terms of fines. You also risk your business being closed down. You must, therefore, avoid making this mistake at all costs.
Get in touch with Infinity22 today, to find out how we can help you.