I own a partnership with 2 other partners, so it's a 3 men partnership.
We trade items on amazon and only on amazon, we don't trade anywhere else because amazon sales are enough for us.
Amazon works in the following way:
Amazon is Luxembourg company. We list our items on amazon, customer look for the items and make an order, customers pay to amazon for the order and we receive this order and ship it. Amazon accumulate all the payments for 2 weeks period and after 2 weeks transfer the accumulated amount less their selling fees to our bank account. So in our bank account we receive not the amount which customers paid, but the amount less amazon fees. Now unless you are VAT registered and you give your VAT number to amazon, they add 15% Luxembourg VAT to their fees and does not issue you an invoice on their fees. They only issue VAT invoice on the fees if you give them VAT number, if you don't give your VAT number to them all you can get from them is a payments statement where it is shown, how much money they received for purchases, how much fees they took (no VAT separated) and how much money was transferred to our bank account.
Recently we have registered for VAT, however we forget to inform amazon about our VAT number.
Now we need to send our VAT return and we don't know how should we show amazon fees in the VAT return.
There are 2 options as we see it:
Option 1) Show amazon fees (which include 15% Luxembourg VAT) into the VAT return as our expenses in box 7. However we don't know in this case do we have the right to do so, bear in mind that we don 't have VAT invoice from amazon and all we got is their payment statement. Also do we need to account for reverse charge if we have the right to include their fees as our expenses.
Option 2) Inform amazon about our VAT number. They claim that if we give our VAT number they will stop adding 15% Luxembourg VAT on their fees from that point, as for previous amounts however, they said that they can refund VAT taken and provide the appropriate documentation but this process can take up to 6 month. The questions is what should we input in our VAT return if if we don't yet have the corrected documentation (i.e. invoices).
So here is our situation.
I would appreciate any accounting help or advice.
Thank you very much in advanced.
Replies (4)
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Surely
Amazon are at fault here. If they are charging you VAT within the EU, whether or not you are entitled to claim it back, they should issue you with a 'proper' VAT invoice. VAT experts more up to date than me will no doubt comment.
YES
So can anyone answer me:
DO I HAVE THE LEGAL RIGHT TO SHOW AMAZON FEES AS MY EXPENSES IF ALL I HAVE IS THEIR PAYMENT STATEMENT BUT NOT INVOICE?
YES