VAT Calculation Service – FAQs

Updated on May 27, 2022

VAT Calculation Service

I have enrolled into the VAT Calculation Service, but what is the service I will receive as a seller?

An invoicing feature is included in the VAT Calculation Service provided by Amazon. The Downloadable VAT Invoice badge will now be available to Amazon Business sellers who sign up for our VAT Calculation Service, allowing them to increase their product visibility on Amazon Business. A Downloadable Receipt Badge will also be displayed on offers from Amazon Business sellers outside of the EU that ship items directly from their non-EU location to clients situated in the EU (acting as the importer of records).

Is there an incremental fee to enroll and use Amazon’s VAT Calculation Service?

A seller who meets the minimum registration criteria can use Amazon’s VAT Calculation Service.

Can I use Amazon’s VAT Calculation Service globally or only within the EU (European Union)?

In order to use Amazon’s EU VAT Calculation Service, you must be a seller on the Amazon EU marketplaces. As a general rule, the VAT Calculation Service only accepts orders for goods shipped within the European Union. VAT Computation Service will, however, issue a receipt (i.e. a “proof of purchase,” not a VAT invoice) without VAT calculation for orders that are transported straight from outside the EU into the EU.

Is there more information on how Amazon will perform tax calculation via the VAT Calculation Service?

Our EU VAT Calculation Service Methodology paper is available here. This article will provide you an in-depth look at the features and the rationale and approaches that were used.

Is there more information on how Amazon will calculate and collect EU VAT from July 1, 2021?

Refer to our EU VAT e-commerce legislation page for guidance. The EU VAT on e-Commerce (EU VOEC) Legislation will have an impact on sellers’ activities on Amazon.com.

How will I identify if a transaction falls under Union One Stop Shop (UOSS) in my VAT Calculation Report?

Look for a value of VCS EU UOSS in the Reporting Scheme column in the VC Report. In this way, transactions that have been computed using UOSS can be easily identified.

Can I set my activation date to any date in the future?

Vendors have the option of scheduling the start of the VAT Calculation Service for a later date. The first possible activation date will be five working days after you register.

I made an error, how can I update my VAT Calculation Service settings?

In Seller Central, you can return to the VAT Calculation Service settings page and make any necessary changes. Here you will find the tax information section.

When I submit VAT-inclusive pricing to Amazon, how will Amazon know how much VAT I included in the price?

If you are VAT registered in the target marketplace country, the VAT incorporated in your pricing should reflect that. Your Amazon.de prices should, for example, include German VAT if you are VAT-registered there (assuming there are no special VAT rates applicable). For countries where VAT registration is not required, pricing should be inclusive of that country’s VAT, which you specified throughout the tax enrollment procedure. Amazon.de prices should include UK VAT if you selected the UK as the default country for VAT exclusive prices and you are not registered for VAT in Germany (assuming there are no special VAT rates applicable).

How will Amazon calculate my VAT exclusive price on sales to customers?

Your display price (tax-inclusive) and your VAT registration status in some countries are used by Amazon’s VAT Calculation Service to determine the exclusive price (VAT exclusive price) based on the VAT rate that is applied to that price.

The EU VAT Calculation Service Methodology booklet contains full information on how tax calculations are made and how it effects your pricing.

Will my VAT exclusive price be visible to buyers?

As long as you’ve signed up for Amazon’s VAT Calculation Service, your VAT-exclusive prices will be accessible only to Amazon Business customers.

When will you start calculating VAT on my sales and generating VAT invoices?

On the activation date you specify and if your settings meet the eligibility conditions for participation in the VAT Calculation Service, VAT will be calculated on your orders.

What does the invoice that Amazon creates look like?

View a sample invoice

Should I continue to issue VAT invoices once I enroll in Amazon’s VAT Calculation Service?

Our VAT Calculation Service will automatically issue invoices and credit notes to Amazon Business clients and customers who have placed their VAT numbers or tax codes into their accounts, when appropriate. When a customer enrols in the service, you should stop issuing VAT invoices and credit notes for those transactions. Credit notes would still be necessary for transactions that occurred before the VAT Calculation Service was activated.

Can VAT Calculation Service correct VAT invoices?

It is possible to change the billing address and/or the legal business name on the VAT invoice using Amazon’s VAT Calculation Service. It is the responsibility of the VAT Calculation Service to amend the Billing Address and/or Legal Business Name on the original invoice in order to get a credit note from VAT Calculation Service.

If I am enrolled in FBA, do I need to enter the Amazon ship-from locations or my own?

Your default ship-from address should be the address from which you self-fulfill your products. For FBA items, our VAT Calculation Service will use Amazon’s fulfilment location addresses.

What happens if I ship products from locations outside the EU?

Using the service for your Amazon FBA orders is possible even if your products are shipped from areas outside the EU. Simply set your non-EU address as the default ship-from location when signing up. VAT Calculation Service will, in general, solely calculate VAT and issue VAT invoices for your FBA offers. As an exception, if you’re importing goods from outside the EU, clearing the customs and taxes related with that import in your own name, and then selling them within the EU, you can use that destination as the default ship-to address. In this instance, the VAT Computation Service will also perform VAT calculation and issue VAT invoices.

Tax invoices will not be issued for orders that are directly transported from outside the EU into the EU, but just a receipt (i.e., a “proof of purchase”) will be issued.

Can you calculate VAT on products that are subject to different rates (i.e., standard, reduced, super reduced, and zero rated)?

In addition to food, clothing, and books, our VAT calculating service also supports a variety of other products that are subject to a different VAT rate. As part of the enrolling process, you’ll be asked to select an Amazon-supplied default product tax code (such as “standard” or “food”) to be applied to your listings. Overriding the default tax code for multiple product tax codes can be done by entering a product tax code in the offer field. The whole list of goods tax codes can be found on this page.

What happens when my products are shipped cross-border to a destination outside the target marketplace country?

It will take two stages to figure out how much the consumer will be charged. For starters, we’ll subtract the VAT from the VAT-inclusive offer price in order to arrive at the VAT-exempt selling cost. Our next step is to establish the correct amount of VAT to be added to the VAT-exclusive selling price using your tax settings and transactional information (including location, product, and customer information). A higher or lower VAT-inclusive price for the consumer may result from this. There may be no additional VAT due if the customer is a VAT-registered business or if the order is sent outside of the EU (subject to the reverse charge mechanism or zero rate). We do not charge additional VAT for products that are transported outside the European Union.

Tax Identification Number

How can I get a VAT registration number for my business?

Please consult your tax expert if you believe that your business is necessary to be registered for VAT purposes.

Is it mandatory to have a VAT number to join Amazon’s VAT Calculation Service?

Sellers are required to supply at least one valid EU VAT registration number in order to enrol into the VAT Calculation Service, in theory. Sellers who want to use Fulfillment by Amazon must supply the EU VAT numbers for all countries where their merchandise is located when signing up. Your firm will be subject to additional VAT registration and reporting responsibilities if you store FBA units in a country other than your home market. Consult with a tax professional if you have any questions.

Will Amazon verify my VAT registration numbers?

A seller’s VAT registration number is indeed verified by Amazon. Checking against the EU’s VAT Information Exchange System is just one example (VIES). Allow up to four days for the verification of your new VAT registration number.

Can I enter multiple VAT registration numbers?

In order to enrol in Amazon’s VAT Calculation Service, you can provide various EU VAT registration numbers. Seller Central’s Account Info page has a Tax Information section where VAT registration numbers can be entered.

Is it mandatory to have a VAT number in the country where I have my default shipping address?

No. Your default ship-from location must have a VAT registration number in order to accurately calculate taxes on your self-fulfilling orders within the EU. As part of the FBA programme, you’ll need to supply the VAT registration numbers of any Amazon fulfilment sites you’ve signed up for. The EU VAT Calculation Service Methodology provides a comprehensive overview.

I received a new VAT registration number, where do I enter it?

Using the VAT Calculation Service tab in your Seller Central account, you can amend, delete, or add extra VAT registration numbers.

Default Shipping address

What is the default Ship-from address used for?

To establish where you will self-fulfill your orders, we use the default ship-from address. Please refer to the EU VAT Calculation Service Methodology document for a detailed description.

What is the difference between the ship-from address and the Registered Business Address on my account?

It’s important to note that the ship-from address is used to send out seller-fulfilled items, while the registered business address is used to indicate your principal or formally registered site of business.

What if I have multiple locations that I ship my inventory from?

Amazon’s VAT Calculation Service can only support a single ship-from location for items fulfilled by sellers at this time. Upon shipment confirmation, you can change the ship-from location if you have numerous ship-from locations. Referring to the EU VAT Calculation Service Methodology document might help you decide if Amazon’s VAT Calculation Service is right for your company.

Why do you need the complete address of my warehouse?

Amazon’s VAT Calculation Service requires sellers to submit a complete ShipFrom address in order to execute precise tax calculations.

Product Tax Code

What are Amazon-defined Product Tax Codes used for?

A Product Tax Code (PTC) is an Amazon-defined code that has the relevant VAT rates for a certain product category in the European Union. Calculating your products’ proper VAT rate is done using the PTC. Choosing a default PTC for most of your listings is an option. An additional PTC setting is available when you list an offer.

How do I know which Product Tax Code (PTC) applies to my product?

Products tax codes (PTCs) are available for merchants to choose from in our VAT Calculation Service. If you’re unsure about which PTCs are right for you, talk to your tax professional.

What do I set my default Product Tax Code (PTC) to?

All products without an offer listing level PTC will have the default Product Tax Code (PTC) applied. A good rule of thumb is to make your default PTC your primary PTC. Your tax advisor can help you determine which of the pre-installed PTCs is most appropriate for your situation.

Why will I no longer be able to select ‘A_GEN_NOTAX’ as my default product tax code on VAT Calculation Services?

It is meant to be used for products that do not fall under EU VAT, such as gift cards and vouchers. ‘A GEN NOTAX’ Seller Central’s support page for ‘A GEN NOTAX’ explains this in greater detail.

In Seller Central, you’ll still be able to pick the best default product tax code for your situation.

My tax advisor has confirmed that some of my listings are outside the scope of VAT, and I should use ‘A_GEN_NOTAX’ as the product tax code. Am I still able to set this product tax code?

Yes. As long as you’re confident that ‘A GEN NOTAX’ is the correct product tax code for your situation, you can continue to use it for your offers on Shopify’s marketplace. However, as previously said, you will not be able to make it your normal product tax code.

The default product tax code will be overridden if you assign a product tax code to one of your listings. In Seller Central’s Manage Inventory, you can look through your listings’ specifics and make necessary changes to the tax code.

I am currently using ‘A_GEN_NOTAX’ as my default product tax code. Will I be impacted by this change?

Not immediately. If you are currently using ‘A_GEN_NOTAX’ as your default product tax code, this will continue to apply until the next time that you update and save changes to your VAT Calculation Service settings on Seller Central.

However, please note that in the near future we will stop allowing the use of ‘A_GEN_NOTAX’ as the default product tax code. Before we do this, we will give you a 30-day notice to prepare for the change. In the meantime, we encourage you to start verifying whether ‘A_GEN_NOTAX’ is the most appropriate product tax code for your listings.

If you are unsure which default product tax code is right for your circumstances, we recommend you to speak with your tax advisor.

How can I change the Product Tax Code (PTC) of one or more products?

According to Amazon’s Product Tax Code (PTC), particular product categories in the European Union will be subject to the appropriate VAT rates. In cases where no tax code has been supplied, the default PTC will be utilised. Manage Inventory in Seller Central or an inventory file can be used to set a PTC that is different from the default PTC for some of your products.

VAT Calculations Report

What is the VAT Calculations Report ?

The following details can be seen in the VAT Calculations Report:

Sold items, refunds, and returns are all subject to a sales tax calculation by the VAT Calculations Service at Amazon
IT E-invoices submitted to SDI (Sistema di Intercambio) and validation status of e-Invoices VAT Invoices updated by Amazon’s VAT Calculation Service on behalf of sellers using the service
Reports > Tax Document Library > Amazon VAT Calculations Tab is where you’ll find a VAT calculation report.

The Amazon VAT Invoices Tab can be found under Reports > Tax Document Library.

If you use any of your personal information for reporting or tax purposes, you are solely responsible for its correctness.

Who can use the VAT Calculation Report and VAT Invoices?

All active Amazon VAT Calculation Service sellers have access to the report and VAT invoices. Tax Settings permissions must be set to View & Edit for multi-user accounts.

How is the VAT Calculation Report different from the VAT Transactions Report?

Monthly reports on VAT transactions, including sales, returns, refunds, cross-border inbound shipments, and cross-border fulfilment, are included in the VAT Transactions Report.

Detailed information on VAT calculations and invoices generated by the VAT Calculation Service is provided in a report known as the VAT Calculation Report. FBA inbound shipments and fulfilment centre transfers are not included in the VAT Calculation Report. The VAT Transactions Report has more information.

How soon will VAT Calculation data and invoices be available in the VAT Calculations Report?

Three days after an order has been sent, the VAT Calculations Report will contain the calculation data and invoices.

How soon will invoices be available in the Amazon VAT Invoices?

Three days after the order is received, VAT invoices will be available under Amazon VAT Invoices

What data fields are available in the VAT Calculations Report?

The names, definitions, and examples of the fields may be found here.

What are the different transactions contained in VAT Calculations Report?

Calculation of VAT: The following details can be seen in the VAT Calculations Report:

Sold items, refunds, and returns are all subject to a sales tax calculation by the VAT Calculations Service at Amazon
Sellers that use Amazon’s VAT Calculation Service to generate VAT invoices can submit these invoices to the SDI (Sistema di Intercambio) for approval.
Amazon’s VAT Calculation Service has altered VAT invoices on behalf of sellers who have used the service. If you’d like to see all of your invoice and receipt data for a specific time period, the Invoices Report can help. It is possible to download the VAT invoices in a zip file format.

If you have a large number of invoices for a certain time period, processing and download performance may be affected.

Will VAT Calculation Service comply with the e-invoice requirement in Italy 2019?

Yes. Activating Amazon’s VAT Calculation Service means that Amazon will prepare an XML-PA invoice and submit it immediately to the tax site, Sistema di Interscambio (SDI), on your behalf. The EU VAT Calculation Service Methodology document has additional details.

What does it mean to submit invoices (and credit notes) to SDI?

The Italian government owns and operates the SDI portal. SDI requires a specified XML format for all in-scope invoices. Once an invoice has been submitted, it will either be accepted or rejected by the system that submitted it. Accepted invoices are delivered to the SDI mailbox of the customer via SDI.

When will Amazon submit invoices to SDI?

As soon as the invoice data is ready, VAT Calculation Services creates and submits it to the SDI through XML. After the SDI has reviewed the data, the official invoice is sent to the customer.

I use VAT Calculation Service; do I need to provide any other data?

XML invoices generated by VAT Calculation Service will require your SDI account ID and a certified email address. In order to supply Amazon with your SDI data:
Go to Settings in Seller Central and select Account Info.
Click on VAT/GST Registration Number in the Tax Information section.
In order to edit your Italian VAT Registration Number, click on the Edit button.
Enter your SDI account number and a valid email.
To save your changes, use the Save button.

What happens if I do not provide SDI account ID and certified email address?

Your SDI Account ID and Certified Email Address are used by the VAT Calculation Service to determine if an XML invoice is required. Your consumer will receive a PDF Invoice if you omit this information.

Where can I download the official XML invoice?

To obtain an official XML invoice, you’ll need to log in to your personal tax portal on the website of the Italian tax authorities. While Amazon will send an additional PDF and XML invoice to SDI for each order placed through Seller Central, this is not a legitimate bill. Only the Tax portal can provide you with an official invoice.

How do I obtain SDI Account ID and Certified email address?

SDI account ID and certified email address can be obtained immediately from the Interchange System website.

What will happen when there is a return order; will Amazon submit the credit note through SDI?

Yes. SDI will receive an XML-PA credit note immediately from Amazon.

What do I do if a customer asks me for an invoice?

Make sure that the customer has registered their VAT number or tax code in their Amazon account if you receive an invoice request from them. For Amazon Business customers, the VAT Calculation Service will immediately generate an invoice.

In which cases does the VAT Calculation Service issue a receipt?

For the following usage cases, the VAT Calculation Service generates a purchase receipt:

VAT invoice badges were issued for those orders where the seller did not submit a valid VAT registration number in the jurisdiction where the goods were shipped.
It was issued for intra-EU B2C sales in which the seller did not have a Union-OSS registration or gave a VAT number in the EU country of destination.
Self-fulfillment into the EU is possible for Sellers shipping goods from outside the EU.
It is illegal for sellers to sell under their Italian VAT registration number to customers who do not have a VAT registration number or a Codice Fiscal in their Amazon account.

What should I do if a customer asks me to change the invoice?

If a customer contacts you about making changes to the VAT Calculation Service invoices that were sent to them, the procedure is as follows:
Recommend that customers contact Amazon Customer Support to have their invoices rectified if they seek a change to their “Billing address” or “Business Name/Buyer Legal Name.”
It is necessary to cancel the VAT Calculation Service-issued invoice through credit note and issue a new invoice to the customer if the customer requests a change in the invoice that is not connected to the “Billing address” and/or “Business Name/Buyer Legal Name.”

What should I do if I have issued an invoice for an order for which the invoice has already been issued by the VAT Calculation Service?

You’ll need to use a credit note to cancel an invoice if you’ve issued two for the same transaction.

How do I know if the VAT Calculation Service has issued an invoice or receipt for a customer?

VAT Calculation Service Report is at your disposal and contains information beginning the third day following delivery.. It’s important to note that this applies before the three days: The VAT Calculation Service will generate an invoice if the customer is an Amazon Business customer (you can verify this in the order detail where documentation of the customer type can be found). The customer’s Amazon account must have a tax code or VAT number entered if the order does not have the Amazon Business emblem on its order page and the customer has requested an invoice. The VAT service has automatically issued an invoice if you submitted this information. The VAT service has issued a purchase receipt if you have not entered this information.

Why is my order excluding VAT if the buyer is not an Amazon Business customer?

Customer accounts come in two varieties:

The standard customer account allows the customer to store their VAT number. It is possible to omit VAT transactions when a VAT number is inserted into the account. Customers who aren’t Amazon Business customers won’t be able to see the VAT-exempt price on the product detail page, and they won’t be able to take advantage of any of the other special perks available to Amazon Business customers.
Log in with your company name and email address to access Amazon Business Customer Account features (customized spending limits, display of net VAT prices, invoice management, etc.). On the product detail page, Amazon Business customers can see pricing excluding VAT and take advantage of exclusive discounts. VAT can be avoided if certain conditions are met. Here, you may learn more about Amazon’s Business Customer Accounts.

What is the list of special EU territories which fall outside the scope of EU VAT rules?

The table below provides a list of territories where the EU VAT rules do not apply. Therefore, VAT Calculation Services (VCS) treats shipments to these territories as VAT exempt for exports.

Territories VAT rule
(a) | the Canary Islands; Tax Exempt
(b) | the Åland Islands; Tax Exempt
(c) | the Channel Islands( Jersey/Guernsey) Tax Exempt
(d) | the Island of Heligoland; Tax Exempt
(e) | the territory of Büsingen; Tax Exempt
(f) | Ceuta; Tax Exempt
(g) | Melilla; Tax Exempt
(h) | Livigno; Tax Exempt
(i) | Campione d’Italia; Tax Exempt
(j) | the Italian waters of Lake Lugano Tax Exempt
(k) | the French overseas departments; Tax Exempt

 

Hungarian Real Time Invoice Reporting E-invoicing Requirements

What is Real Time Invoice Reporting in Hungary?

E-invoicing Requirements in Hungary for Real-Time Invoice Reporting
The Hungarian term for this is “Real Time Invoice Reporting.”

For my HU sales, will I still receive a PDF invoice?

Yes. Amazon will continue to generate a PDF invoice for any sales originating from your HU VAT Registration. In the event of a VAT dispute, this will serve as your official VAT receipt. A real-time XML file of your invoice data will be generated by Amazon and sent directly to the tax authority.

How do I setup my E-invoicing Credentials?

The Primary User of the Hungarian Tax Authority’s Online Invoicing System (commonly known as NAV) must create E-invoicing credentials (formally referred to as “The Technical User”) (a person having access to the VAT payers account). Technical user is a machine identification mode that is required for communication between the invoicing programme that is issuing an invoice and the server of the Hungarian Tax Administration.

You’ll need to add your HU VAT Registration in Seller Central along with your Tax Authority’s Technical User credentials once you’ve created them in the system. By connecting directly to the tax authority’s system, Amazon is able to record your invoices in real time. Go to https://onlineszamla.nav.gov/hu/home for further information

Why does Amazon require E-Invoicing Credentials for my HU VAT Registration Number?

In order for Amazon to report your Hungarian sales to the Hungarian Tax Authority on your behalf and in real-time, you must supply your Technical User credentials to Amazon. In Hungary, this is an unavoidable tax requirement.

What is a Technical User ID and Password?

A 15-character NAV Technical User name is part of your credentials as a Technical User. The password must be at least eight characters long and can only contain letters and numbers from the English alphabet in upper or lower case. Since both records are generated in NAV, they should be entered into Seller Central only after they’ve been established in NAV.

What is a Signature Key?

Create Technical User credentials in the Hungarian Tax Authority’s Online Invoicing System and the XML Signature Key is also generated. Upper and lowercase letters as well as numeric values are included in the signature key’s 32-character length. A hyphen appears at the third and eighth character. The following is an example of a signature key: 3c-a144-53k3ec1a3c1621NG3MJTKGQL. Example signature key.

What is an Exchange Key?

The Hungarian Tax Authority’s Online Invoicing System additionally generates the XML Exchange Key during the setup of Technical User credentials. In addition to uppercase and lowercase letters of the alphabet, the exchange key also contains numeric values.

d84167HCFQS83WRP is an example of an exchange key.