From 1 January 2021, Amazon will be responsible for collecting UK VAT on the following sales of goods delivered to UK customers if ordered through any Amazon store:

1. Goods delivered from inventory held outside the UK with a shipping value of up to £ 135; and
2. Goods delivered from UK stocks of whatever value unless you, as selling partner, are not based in the UK.

Where any of these deliveries take place, Amazon will calculate and collect UK VAT from the customer at checkout and remit it directly to the UK Tax Authorities. You will not receive UK VAT in your withdrawals and you will not have to transfer these amounts to UK tax authorities.

Please note that the current VAT exemption for sales of goods below £ 15 where goods are delivered to UK customers from stock held outside the UK will also be removed from 1 January 2021 UK VAT will be calculated and collected by Amazon on the date of that sale, regardless of their value.

There are exceptions to the sale of goods supplied to customers in Northern Ireland for which you may remain responsible for UK VAT due. For more information on the application of UK VAT rules in Northern Ireland, please see the FAQs below.

You will continue to be responsible for accounting for all UK VAT on all other supplies, including supplies to UK VAT registered business customers. Read the information below about this change and the implications for your business.

More information on this law is available from the UK tax authorities here .

Preparing for this change
To best prepare your business for this shift in levying UK VAT on sales to UK customers, we recommend that you do the following:

1. Review and update your Merchant Center account details accurately by checking:

• Your company address – Amazon will use this information to determine your primary place of business. 
• Your Default Shipping Address – Amazon will use your default shipping address to show customers accurate prices including VAT.
o If you are registered for VAT calculation services or have used VAT calculation services in the past (including starting the registration process), please go to the VAT calculation settings to update the default shipping address.
o If you are not enrolled in VAT Calculation Services, please visit Shipping settings to review and update.
• Your VAT registration numbers for the countries where you hold your stock. Amazon will use your European VAT Registration Data to ensure accurate reports and documentation are produced to ensure VAT compliance in these countries. Visit the VAT calculation settings.

It is recommended that you review this information regularly to keep it up to date. For more information on the data to provide and how Amazon uses this data to calculate VAT on your Amazon transactions and fees, see here .

2. Review your list prices on Amazon’s European storefront to make sure they include VAT. Check price settings to make sure they include applicable VAT. You must provide market retail prices, which include all applicable taxes, including VAT, for your storefront. If your supplies were previously subject to VAT exemption for goods sold under £ 15, you may have previously not included VAT in your prices. Visit the Inventory management page.

3. Review and update data on VAT invoices and reports.

UMake sure your UK VAT compliance processes are ready by confirming changes to:

Amazon VAT Transaction Report (AVTR): We will introduce two new columns to AVTR to make it easier to identify transactions where Amazon is responsible for VAT reporting:
• Tax reporting system: This column identifies the tax laws of the transaction.
• Responsibility for Collecting Tax: This column identifies the party responsible for collecting and remitting the tax (VAT) to the authorities. Where it says “Marketplace”, Amazon will pass the VAT on to the authorities. If it says “SELLER”, you remain responsible for any VAT due.

You can see the details of the AVTR field definition here.

VAT Calculation Report (VCR): We will introduce two new columns to the VCR to help you identify transactions for which Amazon is responsible for VAT reporting:
• Tax Reporting Scheme: This column identifies the tax laws of the transaction.
• Responsibility for Collecting Tax: This column identifies the party responsible for collecting and remitting the tax (VAT) to the authorities. Where it says “Marketplace”, Amazon will pass the VAT on to the authorities. If it says “SELLER”, you remain responsible for any VAT due.

VAT invoicing: Amazon will issue VAT invoices to your customers for which Amazon is required to report VAT. No invoices may be issued for these deliveries. Where Amazon is required to report VAT, you will be able to download two separate invoices from the Merchant Center: (1) Invoice between you and Amazon for tax settlement purposes (2) Amazon VAT invoice for your customer. Amazon is required to issue a second invoice to the customer and this is not needed for tax purposes. You can download invoices from the Manage Orders section of the Seller Center when downloading invoices today.

4. Please confirm your actual shipping address when confirming the shipment

If you are shipping goods directly to a customer, you will need to provide the actual shipping address when confirming shipment via the Shipping Confirmation page in the Merchant Center, Shipment Confirmation Template or Order APIs. If you are using the Orders API to confirm shipment, you will need to update your system to share and display the delivery address via the API. Please visit the support pages for more information.

5. Make sure each order received from a customer is shipped in a separate, single shipment.

If you ship directly to a customer, each order received in one order is shipped separately. Do not split one order number into multiple shipments, or combine multiple order numbers into one shipment.

Frequently Asked Questions
What will change in the new VAT regulations?

If you are supplying goods to UK customers who are not registered for UK VAT :

• From stocks held outside the UK :
o Amazon will have to collect and remit UK VAT on this sale if the shipment value of these goods does not exceed £ 135; and
o If your shipment value is over £ 135 you will still have to pay VAT and any import duties yourself as you do today.
• From inventory held in the UK and your primary place of business is outside of the UK, Amazon will be required to collect and remit UK VAT on this sale.

Please note that the current VAT exemption for sales of goods below £ 15 where goods are delivered to UK customers from stock held outside of the UK will also be removed from 1 January 2021 on these sales.

The above changes do not affect sales to UK customers who are registered for UK VAT (B2B customers). See the frequently asked questions about changes for B2B customers below.

There are exceptions to the above for certain sales of goods supplied to customers in Northern Ireland for which you may remain responsible for UK VAT due. More information on Northern Ireland can be found in the FAQ below.

The UK government is expected to publish a law regarding these changes in the fourth quarter of 2020. We will keep you informed of any changes from current expectations. We’re here to help you prepare for these changes.

Who is affected by the new rules?
The new UK VAT rules will affect your business if:

• You deliver goods to UK customers who are not VAT registered in the UK, outside the UK; or
• Delivering goods to UK customers from UK stocks that are not UK VAT registered and you are based outside the UK.

The changes only apply to certain supplies to be delivered to customers who are not VAT registered for UK VAT. This does not affect deliveries to UK VAT registered customers and some deliveries to Northern Ireland customers.

Sellers of Affiliates continue to be required to comply with all UK VAT registration obligations and settle all UK VAT due on sales, purchases and imports in addition to the above deliveries.

How do these VAT laws apply to customers in Northern Ireland?
The new UK VAT rules will not apply to the following supplies delivered to customers in Northern Ireland :
1. Goods delivered from stock held in the EU, regardless of value; and
2. Goods delivered from stock held in Northern Ireland, regardless of value, unless you, as the selling partner, are not based in the UK.

Where any of these deliveries take place, you will still be responsible for accounting for any VAT owed and remitting it to the appropriate tax authorities.

I am already using prepaid import VAT for shipping to UK customers. How will this change affect me?
From 1 January 2021, Amazon will calculate and collect UK VAT on all shipments to UK customers from a non-UK address if the value of the shipment is £ 135 or less. Amazon will pass this VAT on directly to the UK tax authorities.

You cannot use Prepaid Import VAT on these shipments, otherwise VAT will be deducted twice. This includes the services offered by Jersey Post and Guernsey Post for shipping from the Channel Islands.

How will these new VAT rules affect the order receipts in my payouts?
Order receipts you receive from UK sales payouts may change as follows:
• If Amazon is responsible for calculating and collecting UK VAT from the customer at checkout and remitting it directly to the UK Tax Authorities – your payouts will include the order minus the UK VAT charged to Amazon.
• If the customer is responsible for paying any UK import charges and duties – your payouts will include the proceeds of the order less any import charges and duties billed on the customer’s behalf.
• If you are still responsible for calculating and collecting UK VAT or import duties and taxes – your payouts will include the order receipts taken from the customer at checkout.

How will Amazon calculate the VAT on this sale?
To comply with the new VAT regulations, Amazon will calculate and remit VAT due on sales that meets the above requirements.

British Marketplace (.co.uk)
Prices quoted on the UK marketplace will be treated as including UK VAT. Amazon will calculate the UK VAT due on your sales and deduct it from the amount charged to the customer.

For shipments from outside the UK, Amazon will calculate the customer’s order value exclusive of VAT to determine if the value of the shipment is above or below the £ 135 threshold. If the value is at or below this threshold, Amazon will calculate the UK VAT due and deduct it from the amount charged to the customer. If the value goes above £ 135, Amazon won’t keep any amount from the customer.

If you are enrolled in VAT calculation services, Amazon will not use any product tax codes that you provided for this calculation. Your product tax codes will continue to be used for deliveries where you’ll be required to account for VAT due.

If the value of the shipment is over £ 135 and is served by Amazon and you are using VAT calculation services, Amazon will (i) calculate the price excluding VAT using the VAT calculation settings, including the assigned product tax code, and (ii) it will use an estimate of the import charges and duties that will be collected from the customer.

If the value of the shipment is over £ 135, it is done by Amazon and you are not using VAT calculation services then Amazon will (i) charge the customer for the full list price and (ii) apply the estimated import and duty fees that will be charged to the customer.

If the value of the shipment exceeds £ 135 and is filled by the seller, the full list price will be charged to the customer – you are responsible for all costs associated with delivering the goods to the customer, including settlement of any import charges and duties due to the border.

b. EU Marketplaces (.de, .fr, .it, .es, .nl, .se)

Prices quoted on the EU marketplace will be treated as inclusive of VAT in that country of the trading platform. Amazon will (i) calculate the price excluding VAT by removing VAT based on the market country, (ii) determine if the price excluding VAT is below the £ 135 threshold and (iii) will charge UK VAT on this amount, if any below the threshold. The total amount including UK VAT will be charged to the customer.

For example, the prices listed on Amazon.de include all applicable DE VAT. VAT is calculated as follows –
• The selling partner lists the item for 119 € including VAT on Amazon.de (product price 100 € + German VAT 19 €)
• The customer selects an item and chooses a UK delivery address
• At checkout, Amazon will remove German VAT and add UK VAT to the product price (product price € 100 * 20% = € 20). The customer will pay the final price of 120 euros (original total price 119 euros – German VAT 19 euros + British VAT 20 euros = 120 euros)
• Upon completion of shipment, Amazon will transfer the net proceeds of € 100, which is not the price of VAT. (List price at checkout € 120 – UK VAT 20 € = 100 €)

If you are enrolled in the VAT calculation services, Amazon will not use any product tax codes that you provided for this calculation. Your product tax codes will continue to be used for supplies for which you will be liable for any applicable VAT, such as any supplies where the value excluding VAT exceeds £ 135 or where the supply is outside of scope.

If the value of the shipment is over £ 135 and is served by Amazon and you are using the VAT calculation services, Amazon will (i) calculate the price excluding VAT using the VAT calculation settings, including the assigned product tax code, and (ii) it will use an estimate of the import charges and duties that will be collected from the customer.

If the value of the shipment is more than £ 135, it is processed by Amazon and you are not registered for VAT calculation services, Amazon will (i) charge the customer for the full list price and (ii) apply the estimated import charges and duties that will be collected from the customer.

If the value of the shipment exceeds £ 135 and is paid by the seller, the full list price will be charged to the customer – you are responsible for all costs associated with delivering the goods to the customer, including payment of any import charges and customs duties due at the border.

North American Marketplaces (.com, .ca)

Prices quoted in North American markets are exclusive of any taxes. Amazon will apply UK VAT, which will be deducted from the amount charged to the customer.

For shipments from outside the UK, Amazon will use the list price of the customer’s order to determine if the value of the shipment is above or below the £ 135 threshold. If the value is at or below this threshold, Amazon will calculate the UK VAT due and deduct it from the amount charged to the customer. If the value goes above £ 135, Amazon won’t keep any amount from the customer.

If the value of the shipment is over £ 135 and is fulfilled by Amazon then Amazon will apply the estimated import charges and duties that will be collected from the customer.

If the value of the shipment exceeds £ 135 and is filled by the seller, the full list price will be charged to the customer – you are responsible for all costs associated with delivering the goods to the customer, including the settlement of any import charges and duties due to the border.

 Japan Marketplace (.co.jp)
Prices listed on the Japan Marketplace include Japanese Consumption Tax. Amazon will (i) calculate the price exclusive of VAT by removing Japanese Consumption Tax from the price, (ii) determine if the price excluding VAT is below the £ 135 threshold and (iii) will charge UK VAT on this amount if it is below the threshold. The total amount including UK VAT will be charged to the customer.

If the value of the shipment exceeds £ 135 and is fulfilled by Amazon, Amazon will apply the estimated import charges and duties that will be collected from the customer.

If the value of the shipment exceeds £ 135 and is paid by the seller, the full list price will be charged to the customer – you are responsible for all costs associated with delivering the goods to the customer, including payment of any import charges and customs duties due at the border.

What is the definition of “Shipment Value”?
Shipment Value is defined as the intrinsic value at the shipment level of goods sold for delivery to a UK customer. This is the price at which the goods are sold, excluding:

• all shipping and insurance costs which are charged separately to the customer and shown separately on each invoice; and
• VAT or duties payable on UK delivery.

For example, if you are shipping one shipment containing three items, the shipment value is the total price the customer paid for the three items excluding VAT, duties and any shipping or insurance costs that are billed separately.

For any shipments made by Amazon, if you ship a single item but it is included in the same shipment as items sold by Amazon and other selling partners, the value of the shipment is the total price paid by the customer for all items excluding VAT and customs duties and any shipping or insurance costs billed separately.

How will this change affect my VAT registration obligations?
You remain responsible for complying with your VAT registration obligations, including for goods stored in the UK, and for reporting any UK VAT on transactions outside UK e-commerce legislation, including supplies for VAT registered customers.

Visit our dedicated VAT education pages to learn more about your VAT obligations. Visit Tick VAT services, to register today.

What will change in the flat rate system (FRS) with the new VAT rules? Can I still use this rate for tax reporting?
The UK flat-rate system still does not apply to deliveries under the new rules for which Amazon is required to pay UK VAT. Amazon will use the normal UK VAT rates to calculate and withhold VAT on this sale. You can contact your tax advisor to discuss if any changes to your VAT registration with HMRC or the preparation of your VAT return are required.

Do I still need to file VAT returns because Amazon is responsible for collecting VAT on this sale?
There is no change to your requirement to register for UK VAT or to submit UK VAT returns. You will remain responsible for reporting the VAT due on B2B deliveries, the recoverable VAT on purchases, and the net value of any deliveries where Amazon has collected VAT. Contact your tax advisor to discuss these changes in more detail.

What will change in the auction price after the introduction of new VAT regulations?
Please continue to provide list prices including all applicable taxes, including VAT, for European Amazon storefronts. If your supplies were previously subject to VAT exemption for goods sold under £ 15, you may not have previously included VAT in their prices.

Do these rules apply to sales to UK VAT registered customers?
If you are delivering goods to UK customers who are registered for UK VAT (B2B customers):
• From stocks held outside the UK:
o You won’t have to charge UK VAT on this sale if the value of these goods is less than £ 135 and Amazon doesn’t need to collect or transfer – your B2B customer will calculate and remit this VAT on your own via their UK VAT return.
o If the value of your shipment is over £ 135, you will still have to pay VAT and any import duties yourself, as you do today.
• From stocks held in the UK, you will still need to self-collect and remit UK VAT as you do today, regardless of the value of the sale.