Amazon has been on an expansion drift lately. Because of this, the retailer plans to launch its platform for e-commerce in five new countries by early next year. Although their expansion to Chile, Colombia, Nigeria, and South Africa might be interesting when it comes to the potential of the marketplace, Amazon’s launch in Belgium might be the most exciting for e-commerce sellers in Europe.
The expansion to Belgium is planned to be fully up and running in late September 2022. Under the name ‘Project Red Devil’, Amazon will launch their own marketplace and a logistical center in the Western European country. Indeed, the marketplace is planning on employing around 50 warehouse workers and 200 drivers to supply their Belgium buyers. The overall expansion is part of a larger momentum Amazon is trying to create. The retail giant has actually doubled its logistic network in just a year’s time.
For e-commerce sellers, the launch of Amazon in Belgium comes with new opportunities and markets. Still, there are definitely some consequences on your VAT registrations if you want to start making use of these new opportunities. This article will elaborate on these consequences, explaining the opportunities for Amazon sellers, the prerequisites for a Belgium VAT registration, and lastly some other things to take into account.
Amazon in Belgium: opportunities of e-commerce sellers
With around 11,5 million inhabitants, Belgium is a valuable addition to the reach of Amazon’s global marketplace. Belgium isn’t known to develop or use their own retail platforms, the usage rate of foreign retailers is actually a lot bigger. However, this also means that the trafficking of goods takes a lot longer, since most foreign platforms have not yet built their logistical centers in Belgium.
Luckily for customers, Amazon’s launch in Belgium comes with a new logistical center in Antwerp. This will enable fast delivery, which will certainly attract new customers to buy through the platform. The potential for Amazon in Belgium is hard to determine, but when compared to the neighboring Netherlands we can expect at least a doubling of their reach in the first year after their launch. If we consider that the retailer is already the fourth biggest in Belgium, the future seems to be bright for e-commerce sellers.
How about VAT, is Belgium in the EU for VAT?
If you want to make use of Amazon’s launch in Belgium, however, you need to know about the tax situation and what is applicable to you. If you’re a European e-commerce seller, you have most certainly heard of the Amazon VAT requirements. With the introduction of the One Stop Shop (OSS), these requirements have become quite complicated. Oftentimes, multiple VAT registrations are needed when shipping and selling to different countries within Europe.
As part of the European Union, Belgium should also be considered in your VAT registrations. For a more elaborate explanation of the VAT situation in Belgium, you can read our article on VAT in Belgium. Important for now is to understand when and how to obtain your VAT registration number for Amazon in Belgium.
What does Amazon’s launch in Belgium mean for your VAT registrations?
VAT registrations differ per country. Therefore, the way you handle your VAT registration in Belgium is different from other EU countries. You have to take into account the local infrastructure for registration, as well as additional obligations surrounding taxes. However, whether you need a VAT registration to begin with should be determined first.
Fulfillment by Amazon
As an Amazon seller, you can make use of the ‘Fulfillment by Amazon‘ (FBA) solution. In this case Amazon will handle everything surrounding the storage, packaging and shipment of your products. The new center in Belgium is, however, a logistical center. This means that it isn’t included in the FBA. Therefore, your products will not per definition be stored in Belgium for longer periods of times.
Your products will in this case still be stored in a fulfillment center, but just in another one. There are a total of seven options, including Germany, France and Sweden. Because of this, you don’t need a local registration in Belgium but need one in the country where your goods are stored.
Fulfillment by Merchant
The other option is to control all processes yourself, as a seller. This is called ‘Fulfilment by Merchant’. Depending on your bussiness model it is possible that, in this case, you do store goods in Belgium. A local registration is in such a case mandatory. You need a local registration if (1) your goods are stored in Belgium, or when (2) you sell Belgian stored products to a Belgian customer.
Do I need a One Stop Shop (OSS) registration for Amazon’s launch in Belgium?
Whether your sales in Belgium should be declared through your OSS returns depends on the amount of sales you have. If your total cross boundary B2C sales exceed 10.000 euros, your sales in Belgium should be considered for your OSS returns.
However, what should be noted is that all EU countries must have the same way of tax return. That is to say, it is not possible to handle your tax returns over your cross boundary sales through the OSS in one country, but make use of the local registration in another country.
Then again, such a homogenized approach to taxes only applies to your actual sales. If you want to store and ship products, you must also have a local VAT registration. In sum, there are a few possibilities surrounding a local VAT registration or a potential OSS registration:
- If you transport and store goods in Belgium, you use a local registration;
- If you sell goods that are stored in Belgium to another EU country, you need a local and OSS registration;
- If you only store products in another EU country and sell goods to a Belgium customer, you can use the OSS registration.
What more to take into account for your Amazon VAT registrations?
For Amazon sellers, you can either opt to make use of FBA, or you can manage the storage and transport of your products yourself. The way in which your business is shaped determines exactly what registrations you need. There is not one right solution here, every business handles things differently.
Another thing to make sure is to finish all your registrations as soon as possible in order to successfully make use of Amazon’s launch in Belgium. The bureaucratic nature of many institutions results in the fact that it can take up quite some time to finish your local registrations. Since Amazon is ready for launch in just a couple of months, be sure to handle your registrations timely.
If you want to spare yourself the hassle of engaging with yet another mind-bending legislation, Staxxer is more than happy to take up this task for you. At Staxxer, we not only provide a quick and adequate service, our experts are also located in many EU countries.
Therefore, we can help you whenever it fits you, in your own language, with your specific needs. Take a look at our possibilities, or shoot us a message to see what fits best for your company.