New Amazon FBA sellers are often surprised by the complex tax requirements associated with warehousing goods in different countries, as well as the time required to deal with the accompanying administrative tasks.
Many of them are not familiar with how VAT works in Europe. Even entrepreneurs who understand the requirements in Bulgaria often do not know that the storage of goods abroad requires VAT registration in the respective country and regular submission of reports-declarations.
In this article, we will look at the main challenges associated with VAT for Amazon FBA and introduce you effectively solution through our partner who will help you deal with these administrative and accounting tasks.
What is VAT registration in another country?
A Bulgarian company can obtain a VAT number in another EU country. This number is issued by the local tax authorities and is different from the Bulgarian one. This is key for Amazon FBA sellers as they are required to be VAT registered in each country where they stock goods.
The VAT registration process abroad
To start selling on Amazon FBA, you must have a company registered for VAT in Bulgaria. After receiving the Bulgarian VAT number, you should submit documents for VAT registration in one or more countries where you will store goods (for example, Germany, France, Italy).
Registration in another country requires filling out documents, translating company documents and dealing with local tax authorities, which can take 4 to 6 weeks.
Can your accountant register you for VAT abroad?
Usually, VAT registrations abroad are carried out by specialized companies. There are few accounting firms in Bulgaria that offer similar services due to language barriers and the complexity of foreign legislation.
This is where the role of our partner comes in - a Bulgarian platform that offers VAT registration in other EU countries and automates reporting, by connecting directly to Amazon Seller Central and facilitating the management of invoices and VAT obligations.
S4amz also helps you with VAT obligations
Through a partnership with the leading “VAT Compliance” company in Bulgaria, has built its own software facilitating Amazon FBA merchants, S4amz offers you a solution that includes:
- VAT registration in other EU countries, including translation and completion of all necessary documents
- Generation of invoices, automatic validation of VAT numbers in VIES for B2B
- Preparation of VAT reports - in Bulgaria, in FBA countries, under OSS for remote sales
- Submitting reports-declarations to the relevant tax offices
Administrative steps to get started with Amazon FBA
Here are the steps you should take if you want to start an Amazon FBA business and avoid the tax pitfalls: - Company registration - the process in Bulgaria takes up to 5 working days. - VAT registration in Bulgaria - it is recommended to do it before purchasing a product. The procedure takes up to 14 days. - VAT registration in FBA countries - required for each country where you will store goods (4-6 weeks). - Registration under OSS mode – if you do remote sales in other EU countries (up to 7 days).
Amazon FBA VAT Challenges and Prospects
For new Amazon FBA sellers, the VAT registration and accounting process may seem difficult, but at the same time, it opens the door to significant profits. A high entry bar is often the reason for less competition, which creates excellent opportunities for developing a successful business.
S4amz offers complete solutions for developing a successful Amazon FBA business. In partnership with SimpleVAT, we provide you with the best conditions for efficiently dealing with your tax and accounting obligations.