VAT and EU sales

[MustangGT]

I would appreciate some help in getting my head around this.

We buy product into UK then ship some to Amazon EU where we sell into a few countries where we are VAT registered. The VAT on sales revenue is fine, belongs to the country it is sold into.

My headache is the cost of the product. We have paid and reclaim VAT in the UK for all purchases. Should the relevant proportion of this be used to offset the VAT due in say Germany? Currently the total sales VAT goes to Germany, no deduction for costs, therefore HMRC is 'gifting' the VAT to Germany.

Is this correct?

Thanks in advance.

[22s]

Don't you pay import VAT when you ship your product into the European fulfilment centre?

[MustangGT]

22s said:

Don't you pay import VAT when you ship your product into the European fulfilment centre?

Currently no idea, I got lumbered with this part-time role this week, our 3rd party book-keepers seem totally useless, they have asked me to sign off a VAT return for May-July that seems totally ludicrous.

I need to get a lot more detail on this.

[MustangGT]

Thanks for helping me ask the necessary questions.

Yes, we do have an agent who deals with the VAT for Amazon EU, based in Germany.

Yes, our exports to EU are treated correctly, with import VAT being calculated and dealt with by the agent, who also files the necessary EU VAT papers in Germany.

This is a great relief to me. Just the domestic side to sort now.

[StevieBee]

What we need is some sort of trading agreement with the EU to make all this malarky easier.

[RicksAlfas]

StevieBee said:

What we need is some sort of trading agreement with the EU to make all this malarky easier.

It's just as complicated in the EU. For EU-based companies, VAT is charged and due in the EU country where the goods are consumed by the final consumer. Different EU countries have different VAT rates for the same product.

[22s]

MustangGT said:

Thanks for helping me ask the necessary questions.

Yes, we do have an agent who deals with the VAT for Amazon EU, based in Germany.

Yes, our exports to EU are treated correctly, with import VAT being calculated and dealt with by the agent, who also files the necessary EU VAT papers in Germany.

This is a great relief to me. Just the domestic side to sort now.

Great.

We've just been through this with EU expansion and it's a headache and a nightmare. Especially with the Amazon "recommended" tax agents in DE etc. Avoid at all costs if you can - especially if you come across one that rhymes with Pingularity or another which rhymes with Bavalara!

[MustangGT]

22s said:

Great.

We've just been through this with EU expansion and it's a headache and a nightmare. Especially with the Amazon "recommended" tax agents in DE etc. Avoid at all costs if you can - especially if you come across one that rhymes with Pingularity or another which rhymes with Bavalara!

Hmm, the first one you mention is involved, with the Amazon sales side, but not the export side to DE.

I seem to have inherited a complete nightmare. I followed a UK Amazon sales transaction through our QBO system to completion of payment. Totally wrong! No reduction in inventory for a start!

Many thanks for your help with the EU bits.

[22s]

MustangGT said:

Hmm, the first one you mention is involved, with the Amazon sales side, but not the export side to DE.

I seem to have inherited a complete nightmare. I followed a UK Amazon sales transaction through our QBO system to completion of payment. Totally wrong! No reduction in inventory for a start!

Many thanks for your help with the EU bits.

No problem. Our main business is selling on Amazon UK/EU/US - if you want to sense check anything feel free to PM me directly.

[MustangGT]

22s said:

No problem. Our main business is selling on Amazon UK/EU/US - if you want to sense check anything feel free to PM me directly.

Thank you.