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Understanding VAT Registration for Amazon Seller Businesses

Every business owner understands that adhering to tax policies is mandatory no matter where you are or where you do your business. This also applies to Amazon seller businesses as part of their eCommerce accounting responsibilities. It is therefore vital for you as a business owner on Amazon to know when you need to register for VAT in the EU. Taxation is quite a considerable part of the business and should be taken seriously as it directly affects your business’s profits.

VAT Registration

For you to know if your Amazon seller business needs to register for VAT in the EU, you need to consider a number of factors first that will determine if you need to pay VAT in the first place. To start off, your country of origin or where you established your business is where you need to register for VAT. This is where every Amazon seller starts and is the default system. On the other hand, the location of your inventory, as well as the number of sales, will determine if you need to pay for VAT or not.

VAT Registration Thresholds for Distance Selling

Online traders based in the EU and selling goods online to European consumers must consider distance selling rules. Distance sales are goods dispatched to a private consumer based in another country that’s also an EU member state, and the supplier is responsible for delivery. These rules will apply even if you fall into the following categories:

  • You’re a sole trader

  • You’re not VAT registered

  • You only sell through a marketplace

Looking at the rules, distance selling enables you to sell your products to customers based in other EU member states up until set thresholds are met. Before you hit those thresholds, you will apply the outbound country’s VAT on your sales.

Once you exceed the threshold for the buyer’s country, this is the time you switch to your domestic tax rate and ensure you are VAT registered in your country. For a list of each country’s distance selling thresholds, you can refer to this link.

Steps to Ensure You Register and Pay For VAT

As discussed above, it is essential to know the distance selling thresholds if you are to be VAT-compliant. If you’re still not sure what’s the next step for your VAT registration, here are some steps you can take to ensure you register and pay for VAT as required in the EU.

  1. Tax concerns can be overwhelming, so it’s best to get tax advice from an eCommerce accountant to understand your obligations. You will need professional help if you are to fulfil your tax and VAT obligations.

  2. Even before you launch your business and start selling goods, you need to strategise. Make sure you do your research about VAT obligations as an Amazon seller business. This will ultimately help you determine the correct pricing for your products.

  3. Outsourcing your tax filing would be the best course of action. You need to focus on managing your business and becoming an efficient Amazon seller. Distracting yourself with your tax and VAT obligations will only eat up a lot of your precious time.


If you are selling goods to consumers in other EU countries, it can be quite a daunting and confusing process if you’re not prepared for it. There are many technicalities involved in VAT registration for Amazon seller businesses that can be too much even for you. It’s best to leave it to the professionals.

Stop worrying about your tax obligations and focus on growing your business with the help of The Ecommerce Accountant. We are a team of young and innovative accounting professionals that aim to empower, excite, and build confidence in businesses through our range of services. You don’t have to struggle with numbers when you work with us. Book a free strategy session today!

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