Info Needed - Avalara and Singularity

We have been active Amazon sellers for a long time 12 Years ++. Some time ago, Avalara informed us that we needed a German tax number, even though we are located in Portugal within the EU. Despite our initial reluctance, we complied with their request due to Avalara's ability to open cases on the Amazon seller platform, which can lead to disruptions if left unresolved. In the end, we obtained a German VAT number and incurred unnecessary expenses since we can simply file an OSS (One-Stop-Shop) return from Portugal, as we do not utilize FBA (Fulfillment by Amazon) services.

To make matters more complicated, we used to receive monthly invoices from Singularity, the agency Avalara hired to handle German VAT on our behalf, ranging from €249 to €359 per month, often with additional fees. This raised concern with our auditors in Portugal, who noticed that the costs for handling only German VAT were significantly higher than what we pay for our entire company's accounting needs, including receipts, VAT, and other taxes, which amounts to €139 per month. This discrepancy prompted our auditors to contact Amazon, where they discovered that numerous sellers were facing the same issue.

Suddenly, Amazon's VAT services underwent changes, allowing sellers to sign up for Avalara directly within the Amazon platform, with Amazon taking control of payments, monitoring transactions, and making deductions from sellers' accounts. While this arrangement initially seemed to work, we have observed that Avalara keeps increasing charges for their services.

Our grievance, however, extends beyond the rising costs. When we were still using Avalara and Singularity, they handled our year-end 2021 VAT filing, which we paid for and have documented invoices for. Our records in Portugal confirm this. Surprisingly, we received a notice from the German VAT office stating that our 2021 VAT had not been filed. This was before our transition to Amazon's so-called managed service, which is essentially still operated by Avalara and Singularity, with only the system changing.

Singularity recently informed us that our 2021 VAT filing was not completed. They mentioned that the staff we used to work with, including a person named Clair, no longer work for them. They are now demanding a payment of €150 outside the Amazon managed system to rectify the issue, in addition to a German fine of €510 for late filing.

As frustrated as we are with feeling taken advantage of by Avalara and Singularity, we are now forced to pay again for a service we already paid for. The most concerning aspect is that they refuse to deduct the amount from our Amazon account, insisting that we make the payment directly to their account. Furthermore, when our auditors requested the invoice for review before payment, Singularity declined, asking us to trust them and make the payment first, with the invoice to follow at a later date.

Our main questions and concerns are:

Why do Avalara and Singularity have the authority to work closely with Amazon, leading to account freezes, baseless reports against sellers, and the opening and closing of cases, while sellers like us are left without invoices for services paid for and services rendered?

Why are Amazon sellers forced to use an invoice service to send invoices to their customers immediately, while entities like Singularity can operate with apparent impunity, leaving sellers feeling bullied and overcharged?

We feel that Amazon should protect its sellers from such practices. It is possible that Amazon is unaware of these issues, where Avalara and Singularity are demanding payments outside of their platform, repeatedly debiting sellers' accounts for VAT services without providing invoices or detailed services.

We believe we are not alone in facing such challenges. It's important for sellers to speak out and make Amazon aware of these issues to ensure that sellers are not being exploited by VAT agents. This situation is concerning, and we hope that Amazon takes action to address these issues.

Sincerely,

ACL