To be able to automate your VAT calculations and VAT reporting, both VAT Calculation Services (VCS) and VAT Services on Amazon are making an assumption that you need to be aware of before you enrol in these programmes. Both VCS and VAT Services on Amazon assume that you have opted for taxation in the country of arrival of your shipment as from the moment you have a validated VAT number for that country in your Seller Central account. This implies that a cross-border EU sale of goods to consumers (distance sales) will always be taxed in the country of arrival of the shipment if a valid VAT number for that country is available.
The general VAT rules that apply to distance sales state that these sales are taxed in the EU country of dispatch of the shipment as long as you have not reached a certain threshold of distance sales to a specific EU country (ship-to). However, tax payers can also opt to tax their distance sales immediately in the arrival country. Taking the above into account, and when you have not yet exceeded the distance selling threshold, it is important that you have duly informed the relevant tax authorities that you opt to immediately tax your distance sales in the EU country of arrival, prior to enrolling in VCS and VAT Services on Amazon.
If you have any additional questions in this respect, such as how and when to inform the tax authorities, we recommend that you contact your tax advisor.
In order to complete your Intrastat returns, a valid postcode is required for the final destination of the goods in the arrival country (ship-to). Where the postcode of the arrival destination is unavailable for any reason, such as when a transaction relates to a past transaction and the original arrival postcode is no longer available, we will automatically report the postcode as the postcode of the capital city within the arrival country.
Similarly, the weight of any items shipped in a cross-border EU sale of goods is also required to complete your Intrastat returns. This weight will be automatically populated in the AVTR according to details stored in your product tax file. When this information is not available, the weight will default to 1.
An EU cross-border transfer of own goods is a single logistics transaction with two potentially taxable events from an EU VAT perspective: the first is the (deemed) intra-EU supply of goods in the country of departure and the second is the (deemed) intra-EU acquisition of goods in the country of destination. For EU VAT reporting purposes, the best practice is to report these two events in the same month on the VAT and Intrastat returns in both countries. We facilitate this by reporting the INBOUND and FC_TRANSFER transactions in your AVTR based on the date that the goods arrive in the country of destination. Please note that you might need to review your internal processes for these transactions to assess whether any changes are required to align with the AVTR reporting.
For your Amazon FC transfers and AFN Inbound transactions, VAT amounts need to be computed to be reported in VAT returns. This, however, is a net zero computation and does not impact your net VAT liability. This calculation is based on the VAT rate that is applicable to your sales for those products in the respective country.
In some circumstances, it may be possible that your goods are returned by the purchaser to a different country than the one in which the goods were initially shipped. In addition to any adjustments that are required to be made to your VAT returns, in accordance with the position of the EU VAT Committee, we will treat the movement of the goods from the departure country to the country where the goods are returned as an EU cross-border movement of own goods for EU VAT reporting purposes.
This means that no movement of the returned goods is required to be reported in the arrival country of the original sale (in effect, it can be ignored), and only two taxable events occur from an EU VAT perspective: The first is the (deemed) intra-EU supply of goods in the departure country of the sale, and the second is the (deemed) intra-EU acquisition of goods in the country to which the goods have been returned.