It appears the playing field for vat and non vat will be leveled in August - who is this going to affect not being able to be VAT exempt? What will you do to overcome it?

Sell On Amazon Global Selling
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Effective August 1, 2024, Selling on Amazon, Fulfilment by Amazon, and all other services currently supplied by Amazon Services Europe S.à r.l. (ASE) will be supplied by Amazon EU S.à r.l. (AEU). All agreements, policies, terms and conditions currently referring to ASE, including Amazon Payments agreements, will be updated to AEU. Additionally, all invoices issued by Amazon will be issued by AEU instead of ASE after August 1, 2024.

If your company is established in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium or Sweden, you will be invoiced by the AEU branch in your country of establishment. As a result, local VAT rules apply and VAT will be deducted from Amazon fees. In the majority of cases, we expect that you will be able to recover this VAT through your normal VAT return process.

We recommend that you contact your tax advisor for more information on recovering VAT as per your country of establishment’s local regulation.

If your company is not established in the countries listed above, you will be invoiced by the AEU head office in Luxembourg, and there will be no change to how VAT is applied on Amazon fees.

Note: This change doesn’t impact your account access, listings, product pricing, customer reviews, selling services or the price of services.

For more information, go to Update to Amazon UK and EU seller services entity and VAT treatment.

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Can someone decipher this for me? How will it affect for companies doing less than vat threshold and not vat registered?

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If you have declared your vat exemption to Amazon and they stopped charging you vat on fees, that will change and you will be charged vat at the rate in your country. I am assuming you are based in the UK or EU.

So your fees will rise by that rate, for example, if you are UK based, your fees will increase by 20%.

For vat registered sellers, fees will also rise but the var can be reclaimed in the usual way every…

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VAT threshold doesn’t matter on purchases and expenses.

Its same like u pay VAT to your suppliers on your purchases.

Now amazon will charge vat on their services (fee).

If you are doing wholesale, it is better to get registered for VAT. I believe it will save you a few bucks.

Contact your accountant for better advice.

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In general, it is just adding vat to your fees which you are already paying on purchases of vat-able lines.

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Non VAT reg sellers will now have to get better at sourcing.

For Vat reg sellers it’ll mean less cash flow

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Is it better to become VAT registered now?

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Each seller must decide for themselves by working out the cost/benefit of registering. This change in itself is unlikely to be enough to justify it but dependent on turnover, amount saved by being able to claim the vat back, amount that has to be paid for VAT on sales and other reasons, it may be beneficial to register. But it may not be.

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Will make no difference to those vat registered?? But I agree the none vat registered ones will need to be on the ball enough to know it has happened and to make sure their products now make a profit.

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My understanding is that if you’re VAT reg you’ll have to subject to VAT on fees directly (not reversed charged) meaning you’ll get less in payouts but it should then mean smaller VAT bill?