Can you sell on Amazon without VAT Registration? Updated for 2024

If you are about to embark on your e-commerce business journey, Amazon FBA is likely to be one of the first places you research as a possible home for your business and you’ll need to know if you can sell on Amazon without VAT registration. Its sheer scale makes it a promising site for new e-commerce businesses, but it can be difficult to navigate all the rules.

Setting up any new business involves ensuring that you dot all the i’s and cross all the t’s, but the rules for e-commerce businesses are both more plentiful and more complex than those for traditional retail businesses. It needn’t be a headache, however. We’re happy to help you navigate the accounting specifics at every stage of your entrepreneurial journey.

What is Amazon?

Amazon is a vast Internet-based enterprise that allows sellers to “reach tens of millions of shoppers, whether you’re selling one item or millions.” Sellers can sell a vast range of products on the site including everything from books, music, and movies through to housewares, electronics and toys.

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Ultimately, Amazon has transformed itself from an online retailer to a global company that provides a vast range of products and services to a worldwide audience.

What are the benefits of selling on Amazon?

Amazon is incredibly powerful enterprise, especially when it comes to driving many businesses forward in terms of growth and exposure. And, there are a whole host of benefits that come hand in hand with selling on Amazon including:

Enjoy more sales
The opportunity for International expansion
Low marketing costs
Huge potential for sales
Enjoy repeat business
All your orders are packed and delivered on your behalf
Simplicity of operations
Optimum consumer trust
Optimum website functionality

What is VAT?

According to Gov.uk, “VAT (Value Added Tax) is a tax added to most products and services sold by VAT-registered businesses.”

How does VAT work?

For companies buying goods or services, they will pay VAT on top of the purchase price and if a customer buys goods or services from a company, they will also pay VAT on the purchase price.

The company is then responsible for remitting the VAT to its relevant tax authority, which is generally done monthly or quarterly. The VAT threshold in the UK currently stands at £85,000.

Can you sell on Amazon without a VAT registration?

The short answer is yes, you can sell on Amazon without a VAT registration, but there are many caveats.

If you are based in the UK and all your products are sold in the UK then it is a simple matter of whether you have crossed the UK VAT threshold, which stands at £85,000 for the 19/20 tax year.

You can also choose to register for VAT voluntarily.

Selling internationally on Amazon and VAT registration

One of the many benefits of Amazon FBA is its ability to get your products to a worldwide audience with limited additional work for you. It’s an easy step to sell your product across Europe, Australia or even the U.S. but you need to stay sharp to avoid a VAT misstep.

While Amazon may aid you in selling across the globe, they are not responsible for aiding you financially, so it is always prudent to enlist an e-commerce specialist accountant to avoid costly mistakes and penalties.

The potential room for error

You must register for VAT if you are storing goods and/or selling goods and have reached the threshold, but every country’s rules are different.

You could be selling to customers in the UK and under the UK threshold, but storing items in Germany. Under German VAT rules, you must register for VAT immediately (their threshold is zero for foreign businesses) if these goods are sold to Germans or if you are using the Fulfilled by Amazon option in Germany. There are many other specifics, and that is for Germany alone.

VAT registration for Amazon FBA — Seyi Ariyo

Penalties and business cessation

As you can see, it is imperative for all e-commerce entrepreneurs to be on top of their VAT registration, even if you are only selling goods through Amazon FBA. If you fail to register for VAT in any country in which you have crossed the threshold, you can expect penalties (again, the specifics vary depending on the locale). Most countries have an immediate requirement for foreign businesses. Failure to keep up with your VAT requirements will result in your e-commerce business to be delisted by Amazon bringing your e-commerce business to a crashing halt.

The bottom line

You can sell on Amazon without VAT registration, and if your e-commerce business is new, that is likely the case. If you are only selling in the UK, keep an eye on your turnover to ensure your business has not hit the threshold. If you are even considering selling internationally, consult an accountant with specific e-commerce experience in one or more regions to which you are selling your products.

Do Amazon provide VAT receipts?

Yes, you can download or print most VAT invoices from your orders and the process is relatively quick and easy.

To download a VAT invoice you need to follow these simple steps:

Go to Your Orders and select the order for which you need a VAT invoice.
If your order is from a seller who uses Amazon’s VAT calculation service, select Print invoice from the available options.

Does everything on Amazon have VAT?

Sales of digital products and services are shown inclusive of VAT. For example, these include products such as:

Amazon Apps,
Kindle content
E-books
Software & Digital Games
Digital Music downloads
Amazon Music
Cloud Drive.

Why choose Unicorn Accounting?

If you would like our team to talk you through your e-commerce business’ VAT liabilities now, or as you plan for growth, Unicorn Accounting can help!

Here at Unicorn Accounting, our team of specialist e-commerce accountants is happy to chat about all of your eCommerce accounting needs. So, what are you waiting for? Let’s talk and maximise the growth of your e-commerce store. Get in touch!

The best time to act is now.