How to Claim a VAT Refund on your Amazon Seller Fees
Claiming a VAT refund on your Amazon seller fees is a hot topic right now. In this article we’re going to walk you through why you might be able to claim back any VAT that you’ve paid on your Amazon fees and exactly how to do it.
Amazon usually charges VAT on all of their fees until you can prove that you are a business entity. This is to do with EU VAT regulation. Once you provide Amazon with your VAT number they typically stop charging you VAT on your fees and instead reverse charge the VAT on them.
But what happens if you are trading as a business entity but you are not yet VAT registered, should you simply accept the extra costs that you incur due to Amazon charging you VAT on their seller fees with you not being able to then reclaim that VAT from your tax authority?
The short answer is no.
If you’re selling on Amazon and are established as a business in the UK or the EU (excluding Luxembourg) then you may be able to claim back any VAT you have paid on Amazon fees. Amazon themselves have referred to this in an older version of their Business Solutions Agreement:
Amazon Services Europe Business Solutions Agreement S-6(b) prior to Jan 2021
If you are in business and established in a European Union country, but you do not have a VAT registration number issued by one of the European Union countries, then you will be able to provide Amazon with other evidence that you are in business. Acceptable evidence is a copy of a recent corporate tax return or an official document issued by a government agency proving that you are in business. Once your evidence is reviewed and accepted by Amazon, VAT will not be charged by Amazon on the fees hereunder provided you are not established in Luxembourg.
Any fees invoiced from Amazon’s Luxembourg entity. This is typically all fees except Sponsored Ads in the country where your business is established. Eg. if your business is established in the UK then you should be able to reclaim VAT on all Amazon fees excluding Sponsored Ads from Amazon.co.uk.
Amazon sponsored Ads in your home country are usually billed with local VAT even after you have provided Amazon with your VAT number (once you become VAT registered) so those are not affected.
If you can prove that you are a business (even a non VAT registered business) then you qualify to have any VAT you have paid on Amazon fees refunded. It’s that simple. From success stories that we have heard about in the Facebook groups this has been successfully done by hundreds of sellers.
The table below shows a summary of the actions you should take to reclaim any VAT you have paid on Amazon seller fees.
In each of the above scenarios your message could read something along the lines of:
Dear Seller Support
Our business would like to request a refund of the VAT we have paid on Amazon fees please.
According to the Amazon Services Europe Business Solutions Agreement S-6(b): "If you are in business and established in a European Union country, but you do not have a VAT registration number issued by one of the European Union countries, then you will be able to provide Amazon with other evidence that you are in business. Acceptable evidence is a copy of a recent corporate tax return or an official document issued by a government agency proving that you are in business. Once your evidence is reviewed and accepted by Amazon, VAT will not be charged by Amazon on the fees hereunder provided you are not established in Luxembourg. You hereby give the following warranties and representations, namely: (i) that the evidence you submit to Amazon belongs to the business you operate, and that business is established in one of the European Union countries; (ii) that all transactions regarding the services will be business-related transactions made by the business associated with the evidence you submit to Amazon; and (iii) that the evidence and all other information provided by you is true, accurate and current and you will immediately update any such information held by Amazon in case of any changes."
Please find below details that you can use to establish that we are a valid business:
Tax ID (UTR or VAT number):
Trading on Amazon since:
Attached is our company certificate of incorporation, issued by the UK Government and VAT certificate. [For VAT registered Limited companies only]
Attached is our company certificate of incorporation, issued by the UK Government. [For Non VAT registered Limited companies only]
Attached is our company Unique Taxpayers Reference (UTR) certificate from the Inland Revenue and VAT certificate. [For VAT registered Sole Traders only]
Attached is our company Unique Taxpayers Reference (UTR) certificate from the Inland Revenue. [For Non VAT registered Sole Traders only]
Please could we reclaim all VAT paid by our company since our Amazon Seller account was opened and ensure that no further VAT is charged on our Amazon fees.
Title at company
Remember to use the relevant line for your business type regarding the documentation you will attach, and don’t forget to attach the documentation either.
Once you submit your case to claim the refund of VAT paid on Amazon fees it usually takes anywhere from 1-3 months to be actioned. Amazon may come back and ask for further proof in the form of company tax returns or such like. Work with them to provide any details and documents they need (it will all be worth it in the end).
According to some sellers we have spoken to, Amazon confirmed they have quite the backlog of these cases so once your case gets to the right team you may notice that it goes quiet. This looks like they are simply working through the backlog so be patient.
While you wait for your case to be dealt with and all the VAT you’ve paid on your Amazon fees to be refunded you might be wise to get your general Amazon bookkeeping in order too. Ensuring you accurately account for your Amazon sales, refunds, fees and VAT is crucial when it comes to running your Amazon business.
Link My Books does just that, automatically and with absolutely zero effort from you. Our Xero and QuickBooks integrations help e-commerce sellers save time and money by automating their bookkeeping.
We support all the major sales channels including Amazon, Shopify, eBay and Etsy. Each time you receive a payout from a sales channel, Link My Books breaks down all the sales, refunds, fees and most importantly taxes that made up the payout amount.
You end up with a clean summary entry posted to your bookkeeping software which matches exactly the deposit you received into the bank, making reconciliation of your entire month's sales a quick and painless process.
8,000+ sellers are using Link My Books to automate their e-commerce bookkeeping. Isn’t it about time you joined them?