How To Claim a VAT Refund on Amazon Seller Fees

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If you are an Amazon or Amazon FBA seller registered as a business or sole trader in the UK or EU you could be eligible for a VAT refund on seller fees levied against you. 

VAT (value-added-tax) is a tax applied by countries based as a set percentage of the item. In the UK, the VAT rate is currently 20%.

Below we look at some background info to this and how you can reclaim these fees:

Do you have to pay VAT on Amazon Seller Fees?

If you are an Amazon seller and a registered business, for example a limited company, you will be charged VAT by default on your seller fees. However, if you are a registered business – regardless of VAT registration – these should not be levied against you and you will be entitled to a VAT refund on these fees.

When you register for a professional account on Amazon you can choose whether you are eligible or exempt from VAT. Businesses in the UK are required to register for VAT if their turnover exceeds £85,000 in a calendar year although they can choose to register before they reach this threshold.

Regardless of whether or not you are VAT registered, many sellers are incorrectly charged VAT fees against seller fees, luckily it is possible to stop these occurring and get a VAT refund on these by following the steps below:

How do I stop Amazon Charging VAT on my Seller Fees?

The steps below apply to both VAT and non-VAT registered businesses, as either way you shouldn’t be charged VAT on seller fees.

If you have been trading as a non-VAT registered business, Amazon shouldn’t be charging you VAT.

If you have are VAT registered, you can send Amazon your VAT certificate and they will no longer charge you VAT on fees (only sponsored ads).

You can see this in the Amazon Services agreement below which states their official policy on VAT.

"If you are in business and established in a European Union country, but you do not have a VAT registration number issued by one of the European Union countries, then you will be able to provide Amazon with other evidence that you are in business. Acceptable evidence is a copy of a recent corporate tax return or an official document issued by a government agency proving that you are in business. Once your evidence is reviewed and accepted by Amazon, VAT will not be charged by Amazon on the fees hereunder provided you are not established in Luxembourg. "

Amazon Services Europe Business Solutions Agreement S-6(b) prior to Jan 2021

 

Therefore, if you can prove you are a business or sole trader (incorporation certificate is a good document) then they should not charge you VAT.

If you send them this document, they will not only stop the VAT but also refund you the VAT on previous paid seller fees.

Exact steps depend on whether you are a sole trader or limited company and whether or not you are VAT registered.

The full steps and a template for the request can be seen below. The entire process will take around 3 months, if they ask for clarification, restate the request and ask them to look into it and refund your fees.

Steps Needed to Request a VAT Refund from Amazon on Seller Fees

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SOLE TRADERLIMITED COMPANY
VAT REGISTERED- Raise a Seller Central Case (See Instructions Below)
- State you are a business and reference T&Cs (use template below)
- Provide your trading name, VAT certificate & UTR
- State the period you were non VAT registered
- Request a review and refund of VAT on fees for the period before you were registered
- Raise a Seller Central Case (See Instructions Below)
- State you are a business and reference T&Cs (use template below)
- Provide your Certificate of Incorporation & VAT certificate
- State the period you were non VAT registered
- Request a review and refund of VAT on fees for the period before you were registered
NON VAT-REGISTERED- Raise a Seller Central Case (See Instructions Below)
- State you are a business and reference T&Cs (use template below)
- Provide your trading name & UTR
- Ask them to stop charging VAT on fees
- Request a review and refund of VAT on fees for the time you have been trading
- Raise a Seller Central Case (See Instructions Below)
- State you are a business and reference T&Cs (use template below)
- Provide your Certificate of Incorporation
- Ask them to stop charging VAT on fees
- Request a review and refund of VAT on fees for the time you have been trading

Who Do I Contact?

To raise a case with Amazon, log in to your Amazon seller central account and click ‘Request a VAT Refund on Amazon fees from the dropdown:

how do i contact amazon for a vat refund

Template For Requesting a VAT Refund from Amazon and Ensuring no VAT is Charged in Future

Use the template below to request the refund:

Hi,

I would like to claim a refund of the VAT we have paid on Amazon fees.

According to the Amazon Services Europe Business Solutions Agreement S-6(b): “If you are in business and established in a European Union country, but you do not have a VAT registration number issued by one of the European Union countries, then you will be able to provide Amazon with other evidence that you are in business. Acceptable evidence is a copy of a recent corporate tax return or an official document issued by a government agency proving that you are in business. Once your evidence is reviewed and accepted by Amazon, VAT will not be charged by Amazon on the fees hereunder provided you are not established in Luxembourg. You hereby give the following warranties and representations, namely: (i) that the evidence you submit to Amazon belongs to the business you operate, and that business is established in one of the European Union countries; (ii) that all transactions regarding the services will be business-related transactions made by the business associated with the evidence you submit to Amazon; and (iii) that the evidence and all other information provided by you is true, accurate and current and you will immediately update any such information held by Amazon in case of any changes.”

We not have a VAT registration number as yet, but we are in business. I have provided a copy of our UTR Document issued by the Inland Revenue Certificate of Incorporation, issued by the UK Government (Companies House). Our Business Name is [insert business name] and we have been trading on Amazon since [insert date started trading on Amazon]. Please could I reclaim all VAT paid by our company since our Amazon Seller account was opened and ensure that no further VAT is charged on our Amazon fees.

Many thanks

Need Help with Your Amazon Accountancy?

Your Ecommerce Accountant are specialist online accountants working with ecommerce sellers on marketplaces every day.

We help Amazon and Amazon FBA sellers with complex issues such as VAT compliance, selling abroad and tax efficiency.

Contact us today for a free 30 minute consultation on your ecommerce accounting needs.

Ben Sztejka ACA

Ben Sztejka ACA

I am an ICAEW Chartered Accountant with one core belief, make accounting as pain free as possible and focus on adding value to businesses.

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