VAT
Category: tax
Value-Added Tax — a consumption tax charged at each stage of the supply chain.
Value-Added Tax (VAT) is a consumption tax levied on the value added at each stage of production and distribution. In cross-border e-commerce, sellers must register for VAT in each EU country where they hold inventory or exceed distance-selling thresholds, and collect VAT on B2C sales to EU consumers. EU standard VAT rates range from 17% (Luxembourg) to 27% (Hungary).
Examples
- • A Chinese seller using Amazon FBA in Germany must register for German VAT (19%) and file monthly returns via the BZSt portal.
- • A UK seller shipping to French consumers who exceeds €10,000 in EU-wide B2C sales must register for French VAT or use the EU One-Stop Shop (OSS).
- • Amazon charges German VAT on its selling commission and FBA fees, which sellers can reclaim as input VAT on their returns.