Zero VAT or No VAT for Amazon sales in Europe?

Zero VAT or No VAT for Amazon sales in Europe?

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The client is a UK-based and VAT-registered company currently exclusively selling and maintaining stock in European countries. The company is also registered for VAT in these EU countries and reports these Amazon sales on EU VAT returns. When inquiring with the HMRC helpline regarding the applicable VAT rate for UK VAT returns, the adviser explained that these sales fall outside the UK VAT scope. Therefore, these sales should not be included in the VAT box 6.
However, during a recent discussion with an adviser from an e-commerce integration software we use, she shared that, based on her experience, clients in this situation typically use the Zero VAT tax rate to reflect sales on UK VAT returns. Simultaneously, she emphasized that she is not a tax adviser.
This information has led me to question whether I am correct in applying the No VAT rate to these EU sales.
Could you please share your experience or insights on this matter?

Replies (2)

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VAT
By Jason Croke
22nd Feb 2024 10:28

You need to engage with an Accountant or book-keeper so that questions like this can be answered properly, otherwise all you will get is what you are already getting, bits of freely given advice without context and with caveats that mean you are no further forwards with answering the question.

Why is the UK based entity registered for VAT in the UK if it only makes sales in the EU? Does the UK entity actually make any sales in the UK?

I can see that both answers (from HMRC stating its OTS and from your e-commerce agent stating its zero rated) are actually both correct but for different reasons because they are approaching the query from two different angles (VAT rules and book-keeping rules).

But I can't say for sure as not enough facts of the situation, such as why is the UK entity VAT registered if it is not making any sales in the UK.

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Replying to Jason Croke:
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By FactChecker
22nd Feb 2024 12:50

I'm more puzzled that OP, yesterday, stated "we act as external accountants."

But, as always, your questions seem an eminently sensible place to start!

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