Client is company (RRL), VAT registered, flat rate scheme. RRL is selling fiction e-books (ie not to businesses) using Amazon as the marketplace. RRL receives a 'royalty' for each sale. The agreement is between RRL and various Amazon parties, none of which appear to be UK companies. HMRC guidance states that Amazon is considered to be the supplier of the customer and therefore has to charge VAT to customers, who are in Australia, UK, USA, EU etc What I'm struggling to get my head round is RRL's position. RRL is not issuing invoices and the royalties just turn up in RRL's bank account. I seem to read different things in different places - the royalties are 'outside the scope', should be self-billed by Amazon, should have standard rate VAT applied.... Does anyone know the definitie answer please?
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Your client is most likely selling B2B to Amazon SARL in Luxembourg. This being the case you should raise an invoice to Amazon showing their VAT number - your VAT number etc. and also declare the sale on your EC Sales List. However, Amazon may be adopting a form of self billing (Amazon make the rules up as they go along as I well know dealing with them for clients all over the EU).
As to the VAT accounting. if the "customer" is Amazon SARL the supply is outside the scope and excluded from the FRS calculation.