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VAT on Amazon sales & Voluntary Registration

VAT on Amazon sales & Voluntary Registration

Are there any VAT experts out there? As Amazon collects and pays over the VAT on ebooks, should small publishers who are below the VAT registration threshold register for VAT voluntarily, as they should be able to recover the input VAT on their purchases. What is the technical term for where another party collects and pays over the VAT on your sales? Is it some kind of agency? Can anyone point me to the rules on this please?

Thank you.


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03rd Jan 2012 11:17

Voluntary Registration

To answer the question whether a small publisher should register for VAT on a voluntary basis; are they making supplies to Amazon or to private persons?

If their customers are private, then voluntary registration would generally not be helpful. This is because the price to the customers would potentially increase by 20%.

The question is then whether Amazon is acting as agent or principal. There is very little in HMRC guidance, but you could try this link -


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By SamJay
to lionofludesch
03rd Jan 2012 12:05

Thanks for your help Les Howard

I've had a look at the manual, but it doesn't make it clearer. Basically, the publisher uploads ebooks to Amazon Kindle program, and then Amazon sells the ebooks and bills customers. is set up to sell the ebooks from Luxembourg, and so VAT at 3% (previously 15%) is charged and accounted for by to Luxembourg. Sales outside the EU are generally made by, and they handle any US sales tax. Amazon then retains a part of the fee and pays the balance to said publisher. This balance is considered to be publishers compensation (in a similar way to a bookshop taking a supply of books to sell on behalf of a publisher, but said bookshop does not own the books and will return them to the publisher if they do not sell).

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03rd Jan 2012 12:35

What does the contract say?

Amazon will have issued a contract to the publisher, which provides for the agreement. This, with the practical comments you have made, will indicate whether the agreement makes Amazon the agent or principal.

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By Jopheza
21st Mar 2015 10:23

Did you ever get to the bottom of this? Still struggling here.

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