You’ve set up your Amazon account, your first products are live and orders are coming in. Great start. But while you’re selling, you may have already generated revenue in a country where you have no VAT number at all.
This isn’t a hypothetical scenario. It happens to multiple e-commerce entrepreneurs every month who come to Staxxer. Roy van der Deure, VAT specialist at Staxxer, sees it regularly: “Of the twenty new clients I onboard per month, there’s regularly one with this problem.”
How it can go wrong: two situations
When selling on Amazon, everything comes down to one question: where is your stock?
If your products are stored in an Amazon warehouse in another EU country, you’re making local sales from that country. And as soon as you make local sales, you need a local VAT number there immediately — not once you hit a certain turnover threshold. Right away.
Two situations structurally cause entrepreneurs to miss this:
Situation 1: Amazon automatically sets inventory positions
Amazon chooses the cheapest storage location for its FBA program. That could be the Czech Republic, Italy, or another EU country. This is set by default in your account. The result: you have local stock and local sales in a country you never consciously chose.
Situation 2: You skim past the registration settings
When creating an Amazon Seller account, you have to specify per country whether you want to be active there. Anyone looking to start quickly clicks through the steps without consciously deactivating each country. According to Amazon, you’ve set this up yourself. The responsibility then lies entirely with you as the entrepreneur.
What it costs you
The real problem isn’t the missing VAT number at that moment — it’s what correcting it afterwards costs you.
The revenue you’ve already booked without VAT registration has to be included retroactively in a VAT return. That means: applying for a foreign VAT registration after the fact, filing returns for periods that have already passed, and paying the associated costs for every quarter that needs to be corrected. What you could have prevented as a starter for a few hundred euros can end up costing you significantly more.
How do you prevent this?
Three concrete steps before you start selling on Amazon:
- Check your FBA settings. Go to your inventory locations in Amazon Seller Central and check which countries Amazon holds stock for you in. Deactivate countries where you don’t yet have a VAT registration.
- Apply for VAT numbers before you go live. In countries where your stock is held, you need a local VAT number. Applying takes time, so arrange it in advance.
- Have your account reviewed before you scale up. Not sure if your settings are correct? Have a VAT specialist go through your account before you go live with FBA in more countries.
Already selling and not sure if it’s correct?
Not sure whether your Amazon account is set up correctly, or do you want to know whether you’ve already unintentionally made local sales without a VAT registration? Our team is happy to take a look with you!
