How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3356
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Taxation - I sell on Amazon1. If I sell £1 trillion of goods

Customer Question

Taxation - I sell on Amazon
1. If I sell £1 trillion of goods to Germany from the UK I do not require to register for VAT in Germany? (Straight export not distance selling)
2. If I do Distance selling and exceed the distance selling limits of Germany then I have to register for VAT (Concerns only selling to final consumers, not to other businesses.
Distance selling — by mail, phone or internet — offers many advantages, but it also entails certain obligations under EU rules (Directive 2011/83)
https://www.gov.uk/vat-what-to-do-if-youre-an-overseas-business-selling-goods-in-the-uk
3. Before I hit distance selling limit I sold under the limit in Germany usng FBA. Amazon do a thing called FBA (Fullfiled by Amazon) you send goods to their German warehouse you list and sell them on the German site. You sell to Germna buyers contracy with UK seller not Amazon (they fulfill). German vat authorities are claiming I should pay German VAT on the sales not UK VAT. I have paid VAT to the UK. Germans never get regulation wrong but this is the info I found.
Consignment stocks
Consignment stocks are goods you dispatch to another EU country where they’re held somewhere before you finally supply them to a customer in that country.
That means that they are treated as supplied in the UK and liable to UK VAT unless you are also registered for VAT in the EU country to which they are sent, in which case they can be zero-rated assuming all the usual conditions are met. You may also have to account for VAT in that country, and so have to be registered there. Contact the tax authority in that country for advice.
So what is the correct position?
4. Once I am registered under distance selling regulations do I charge UK VAT or German VAT under 1 above?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
In my opinion you are making exports from the UK. In fact the procedure is relatively simple, but laborious. If you sell to a buyer who is registered for VAT in their own EU country then the reverse charge rule applies. You charge VAT output tax at 20% and simultaneously claim input tax of the same amount. Effectively you are zero rating the supply. You will have to render a VAT EU Sales List to HMRC at intervals. They will send you the necessary form to do this. If you are selling to a buyer within the EU who is not registered for VAT in their own country then the supply is standard rated and tax at 20% is added to the invoice and accounted for by you as output tax. There is no requirement for you to register in another EU state to transact your business. I do hope that I have helped solve your conundrum for you.
Customer: replied 1 year ago.

Can I use my numbers so we follow:

1, Your answer is No.

2. You answer is yes. (I assume in calculating the turnover I only use the Distance selling turnover.)

3. You have not answered the FBA question. Sub DS limit sales of goods shipped to Germany FBA warehouse prior to sale. The Germans have assessed me for the VAT I have paid to the UK saying because they were in Germany when sold I have to pay German VAT.

4. You have not answered clearly. Viz once registered under distance selling do my standard exports (1 above) to German then have to go in my German vat return or just items sold under distance selling.

(Also your link to your answer did not work. I got I have no questions. Took a while to get there via help pages. then tried calling just answers suing the phone link to show them this but the phone link is a dead end).

Expert:  bigduckontax replied 1 year ago.
The matter to which you refer is covered in the link I gave you under 'Consignment Stocks.'
Customer: replied 1 year ago.

I am sorry I really want to be clear as to your answer is it:

3. You disagree with the German VAT authorities position and their assertion than goods stored in Germany FBA warehouses when ordered on the German website are liable to German not UK VAT?

This is the wording of the directive:

That means that they are treated as supplied in the UK and liable to UK VAT unless you are also registered for VAT in the EU country to which they are sent, in which case they can be zero-rated assuming all the usual conditions are met. You may also have to account for VAT in that country, and so have to be registered there.

And the last sentence is what puzzles me.

4. We only include distance selling orders in the German VAT return not other goods sold to Germany.

Expert:  bigduckontax replied 1 year ago.

You have it pretty well. If you exceed the German 'distance selling threshold' then you will have to register there also for the German equivalent of VAT. In Germany the rate is 100K Euros per annum. You can find a full list here:

http://www.vatlive.com/eu-vat-rules/distance-selling-eu-vat-thresholds/

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3356
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you fore your excellent support.
Customer: replied 1 year ago.

The advice was I think wrong.

I have checked further.

The German Vat authorities are right.

Expert:  bigduckontax replied 1 year ago.

I am at a slight lloss as to what you are getting at. I have explained the UK VAT position and also the German where the distance selling threshold is 100K Euros in any one year.

However, if you recall I did say:

'That means that they are treated as supplied in the UK and liable to UK VAT unless you are also registered for VAT in the EU country to which they are sent, in which case they can be zero-rated assuming all the usual conditions are met. You may also have to account for VAT in that country, and so have to be registered there.'

Customer: replied 1 year ago.

Consignment sales are different.

https://sellercentral-europe.amazon.com/gp/help/help-page.html/ref=ag_201468410_cont_scsearch?ie=UTF8&itemID=201468410&language=en_DE&languageSwitched=1

I am writing to UK vat at the moment and will see if they disagree will keep you informed. I know you will want to know.

Expert:  bigduckontax replied 1 year ago.
Very sensible; Amazon's advice is littered with caveats so they may not be entirely correct. I will await HMRC's advice. It may take a long time to come through; HMRC are fairly snowed up these days.
Customer: replied 1 year ago.

I am doing it as a vat claim adjustment rather than advice request.

I saw other advice on internet which was quite firm on the German's view. Sadly Germans are rarely wrong when it comes to rules!

What get's me is the complexity of VAT in the "free movement of goods EU". Consignment , Distance Selling and ordinary sales and 40 countries and languages. NUTS.

Expert:  bigduckontax replied 1 year ago.

The general feeling when VAT was introduced was that it was far more comples and more difficult to use than the purchase tax which preceeded it. It was mandatory within the Common Market as it was then. Changes in methods of trading and constant attempts to evade the tax resulted in endless changes. That doesn't take account of the presonnel who were largely ignorant of the tax and ill trained.

You may not be aware that when VAT was first set up it was staffed by a trawl through the Civil Service along the lines 'Anyone want to join a new tax office in Southend?' I know because in my section we encouraged a complete idiot to apply merely to get rid of the fool in the quickest way possible. His applicaion was greeted with open arms. I bought the house of another who had been enticed down to Essex.

.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions