Question about Amazon Charging Tax on FBA Services
Does anyone know if the tax Amazon charges on their commission (FBA or otherwise) is an input tax credit?
For example, looking at the breakdown of an order, towards the bottom it will some something like this (hypothetical values):
Amazon fees
Commission:
Base amount: [-£2.75]
Tax [-£0.33]
FBA fulfilment fee per unit:[-£2.63]
So that value there of -£0.33 - should Amazon even be charging that if we are registered for VAT (we are as far as I know and we have inputted this information to Amazon UK a long time ago). How are they even calculating that value? It’s only 12% of the FBA commission (£2.75).
I’m confused about whether Amazon should be charging VAT here, and if they are, whether we are able to get this back from HMRC.
Any comment is extremely appreciated.
Question about Amazon Charging Tax on FBA Services
Does anyone know if the tax Amazon charges on their commission (FBA or otherwise) is an input tax credit?
For example, looking at the breakdown of an order, towards the bottom it will some something like this (hypothetical values):
Amazon fees
Commission:
Base amount: [-£2.75]
Tax [-£0.33]
FBA fulfilment fee per unit:[-£2.63]
So that value there of -£0.33 - should Amazon even be charging that if we are registered for VAT (we are as far as I know and we have inputted this information to Amazon UK a long time ago). How are they even calculating that value? It’s only 12% of the FBA commission (£2.75).
I’m confused about whether Amazon should be charging VAT here, and if they are, whether we are able to get this back from HMRC.
Any comment is extremely appreciated.
11 replies
Seller_7VbclcPFFRTnc
Do you have a UK VAT number registered on your account ?
Are you in uk ? Remitting your own vat ?
Is it a UK to UK sale ?
Seller_9IMi4VyyvIB2n
Amazon don’t charge VAT on FBA / commission fees, only advertising fees. Is the 0.33 re. advertising?
Google ‘reverse charging VAT’ for more info.
My understanding is that the Amazon fee charging company is based in Luxembourg and follows a reverse charging process re. VAT which means that you have to show Amazon’s VAT (re. fees) in your tax return on a reverse charging basis, i.e. no impact on what you receive or pay as you show the VAT figure in both the in and out boxes of your VAT return. Most accounting software packages will recognise reverse charging and have this as a drop down and record both entries for you, but do check as if not you will have two transactions to record.
Importantly, Amazon advertising is run by a UK based Amazon company so if you advertise, VAT should be treated normally and not under reverse charging.
Winston_Amazon
Hey @Aesir_Europe,
Do you have an update on this?
Regards,
Winston
Seller_5wZQAk9T4L1mg
So after uploading the GST to the tax page of our settings, the tax value on each transaction has reduced from 12% to 7%.
From what I gather, Amazon has now removed the GST (5% in our home province of BC) on FBA commission fees, but is still charging the 7% PST from our home province.
I do not see any option to upload the PST number, which we have, anywhere in the account.
Also, here was the response from seller support, which tells us no tax should be charged and makes no mention of the leftover 7% PST.
7% is better than 5%, but we’d like to figure out why they’re still charging PST and it should be removed. Anyone have any ideas?
Hello from Amazon Seller Partner Support,
I comprehend that following the last correspondence you uploaded a Canada VAT Number as you are based in Canada in order not to be charged for VAT on referral fees.
I can understand how the issue had an impact on your business ans I will be happy to assist you today.
I can confirm that the Canada VAT Number [REMOVED] has successfully been uploaded and it is in accepted status.
I can confirm as well that you will not be charged anymore VAT on referral fees fees as mentioned by the previous colleague that assisted you.
Thank you for your patience and it was a pleasure assisting you today.
