„`html
EU VAT reform 2021 and what the new regulation and One-Stop-Shop mean for Amazon sellers
It is easy to see that current VAT laws in the EU were made for companies like the typical corporations in the 1980s and 1990s – not for online businesses. This means that online traders (and therefore of course Amazon sellers as well) become subject to turnover tax in other countries fairly quick. This might happen for example when Amazon stores your goods abroad and then sells them from there, or if you exceed delivery thresholds.
That’s why it’s time for some value added tax law reforms.
What are the effects of the new regulations after the EU VAT reform 2021?
The EU VAT e-commerce package reforms came into full effect on July 1, 2021, and have revolutionized trades for many sellers. The reform introduced the so-called One-Stop-Shop (OSS), meaning every online retailer can declare all B2C distance sales to other EU member states in their own country of domicile. This means you would still have to pay VAT in other countries, but you can hand in all your documents at your own tax office and won’t need foreign tax numbers for these sales anymore, simplifying compliance significantly.
With the implementation of the One-Stop-Shop, the previous country-specific delivery thresholds were replaced. Instead, there is now a single European threshold of 10,000€. This means that any seller generating more than 10,000€ yearly in combined B2C distance sales across all European countries must transfer the tax abroad, but can easily do so by reporting through the OSS in their country of domicile. Sellers below this threshold can still apply country-specific VAT rules.
To get this whole new system running, a tool with a central user interface was necessary so that an online retailer could file all tax reports at one place for every tax office in every country to access. This tool is now in place in the form of national OSS portals integrated into EU tax authorities‘ systems, making the process of reporting cross-border B2C sales streamlined and efficient.
When did the EU VAT reform 2021 take effect?
The VAT reform indeed happened. While originally planned for January 1, 2021, it was delayed due to the COVID-19 pandemic and discussions among member states. The EU VAT e-commerce package, including the One-Stop-Shop, officially came into effect on July 1, 2021. This means the reforms have been fully operational since mid-2021. The period of uncertainty regarding the exact start date is now well in the past.
The reforms are no longer prospective but are current and operational. The initial delays due to the pandemic and the effort to build the necessary tools for implementation have been successfully overcome.
Now, the €10,000 EU-wide threshold is fully in effect, making it crucial for sellers to understand and comply with the current OSS regulations for their distance sales.
How are Amazon sellers affected by the new EU VAT regulations?
If you now think that’s all, and nobody will need foreign tax numbers anymore – that’s unfortunately not the whole story. The new OSS regulations primarily apply to B2C distance sales of goods where the goods are shipped directly from one EU country to a consumer in another EU country. However, they do not apply to situations where you store your goods in other countries through FBA warehouses and then sell from there, or where you import goods into the EU. Which means: If you store your goods in other countries with FBA, especially within Amazon’s Pan-EU program, you still establish a fixed establishment in those countries. In such cases, the One-Stop-Shop cannot be used for these specific transactions, and you will still require foreign VAT numbers for those countries where you hold stock.
So, while the OSS simplifies VAT for direct cross-border sales, it’s not a complete replacement for foreign VAT registrations for sellers utilizing modern structures like Amazon Pan-EU. This shows once again that legislation can sometimes lag behind the complexities of modern e-commerce, and continuous monitoring for further improvements is essential. Furthermore, significant changes are coming in certain EU countries; for example, Italy is introducing new rules for non-EU sellers in 2025 requiring a €50,000 financial guarantee and the appointment of a fiscal representative to obtain or maintain VAT registration, impacting many Amazon FBA sellers.
Tax liability and voluntarily waiving delivery thresholds with Amazons Central European Program (CEP)
Amazon’s Fulfilment Network Expansion, also called CEP (Central European Program) is very promising for many Amazon sellers due to a special regulation. However, delivery thresholds still have to be taken into account for certain activities unaffected by OSS.
Some of the following information and views may apply only to sellers registered on amazon.de, the German marketplace. Details may vary for sellers mainly based in other countries.
What exactly is the Central European Program and how does the Fulfilment Network Expansion work?
If you take part in the Central European Program (CEP), you allow Amazon to store your goods in fulfilment centres in Poland and the Czech Republic and send them out from there, in addition to the German ones. This is beneficial for sellers due to a delivery cost regulation: With the CEP, you save 50ct in delivery costs for every article you send out – no matter if it’s being sent from the extended centers abroad or from Germany.
This shows very clearly that Amazon takes a great interest in these international connections. The 50ct in price difference are generally seen as a penalty charge for sellers who do not participate in the program.
Tax liability in other countries with the Central European Program
So why don’t all sellers use this Fulfilment Network expansion? Storing or delivering your goods in or from other countries means you are liable for taxes in the respective countries from the very first article sent or stored. This establishes a fixed establishment and is not dependent on the €10,000 OSS threshold, meaning you still require local VAT registrations.
Therefore, if you want to check the box in the seller central to take part in the Central European Program, you have to be registered for taxes in Poland and the Czech Republic already and have both tax numbers on hand – otherwise, you’ll run into complications and even penalties. Germany, for instance, mandates VAT registration regardless of turnover for sellers storing goods or selling in the country, and marketplaces like Amazon require sellers to present valid VAT certificates to ensure compliance.
Necessary steps to prepare for the Central European program
Even if most sellers want to get rid of the 50ct in penalty charge as quickly as possible, there is quite some time needed to complete certain steps in order to benefit from the Central European Program.
This time is needed for mainly two reasons:
First of all, you need to apply for the aforementioned tax numbers. This can take two to three months since the application has to be approved by local tax authorities in Poland and the Czech Republic. On top of that, unplanned events can slow down the process even more – during the peak of the Covid crisis, many of these authorities cut down their staff to one instead of usually five or six employees.
The other reason has to do with voluntarily waiving delivery thresholds (though this concept is largely superseded by the €10,000 OSS threshold for B2C sales).
SPACEGOATS reminder: With the new EU VAT rules effective since July 1, 2021, the concept of country-specific delivery thresholds has been replaced by a single EU-wide threshold of €10,000 for B2C distance sales. However, for goods stored in an EU country (e.g., via FBA), a local VAT registration is generally required from the first transaction, as this constitutes a fixed establishment, making the ‚waiving‘ of delivery thresholds irrelevant for these transactions.
This means if you sell from Poland or the Czech Republic to consumers in another country, you typically pay the Polish or Czech VAT when selling to other countries until your overall EU distance selling turnover exceeds the €10,000 threshold. After that, you pay the VAT rate of the country of the consumer, declared via the OSS. However, for sales from a fixed establishment (like an FBA warehouse), the local VAT rules apply directly and you would report via your local VAT registration. Therefore, if you are selling from Poland or the Czech Republic to Germany, you would generally apply the local VAT rate (23% in Poland, 21% in Czech Republic) and declare it through your local VAT ID.
Especially when selling to Germany with its typically lower VAT at 19%, paying the higher Polish or Czech VAT rates for local sales can be less profitable. The concept of „voluntarily waiving delivery thresholds“ previously allowed sellers to opt to charge destination VAT from the start. Post-OSS, for B2C distance sales that are not from a fixed establishment, once you exceed the €10,000 EU-wide threshold, you are automatically required to charge the destination country’s VAT rate and declare it via OSS, eliminating the need to „waive“ thresholds in the old sense. For sales from a fixed establishment, local VAT rules apply directly. Therefore, it is important to consult a tax advisor to ensure optimal VAT treatment.
Only after these local VAT registrations are completed can you finally tick the box in the seller central to start the Central European Program!
Is the Central European Program worth it for my business?
When it comes to the CEP, it is generally very easy to weigh up cost and benefit: You simply have to compare costs for taking care of taxes in Poland and the Czech Republic with the 50ct penalty charge – and can then easily see when the whole thing is worth it.
SPACEGOATS Extra Tip from our colleagues at Taxdoo: As a rule of thumb, you can assume that the CEP might be worth it once you reach 500-600 FBA sales per month. Definitely worth it to do the math!
Tax liability doesn’t expire with the Central European Program
However, long-term planning is important for participants of the Fulfilment Network Extension: Once started, it’s not possible to simply stop the next month. The tax liability, especially the liability to report and declare, remains until the end of the calendar year.
This means as long as you have a tax number, you are obliged to declare your taxes in the respective country – even if you’ve deactivated the extension in seller central. Your taxes might equal zero, but this has to be reported to the foreign tax authority as well.
The liability only expires when the tax number gets deleted, i.e. fully deregistered. Costs incurred include a fee for the process which is similar to the registration – just the other way round.
VAT and tax declaration liability in other countries: When and how is an Amazon seller liable?
Where am I liable for taxes? What if I only store goods in a country but don’t sell from there? Important questions for sellers that are being cleared up in the following paragraphs.
VAT liabillity for warehousing in other countries
If you sell in another country, you are liable for taxes or definitely at least have to declare and report taxes there, that much is clear by now. However, if you store goods in another country, for example through Amazon FBA, this generally creates a fixed establishment, making you liable for VAT registration and reporting in that country, regardless of whether sales are made directly from that specific warehouse. This is distinct from the OSS rules that cover B2C distance sales without local storage.
To give a tangible example from the Amazon world: In Slovakia, there’s a warehouse that is only used for returns from Amazon, not for immediate resales. Goods are only being stored and then shipped to warehouses in Poland, the Czech Republic or Germany to be resold from there. In such scenarios, while the goods are merely stored, the act of holding inventory in that country typically triggers VAT registration requirements, even if direct sales aren’t made from there. Therefore, just storing goods can indeed make you liable for taxes as a seller, constituting a deemed supply (intra-community transfer) when goods move between your own warehouses in different EU countries.
Unintentionally storing goods in other countries and risking an account blockage
Nevertheless, each seller should track and regularly check where their goods are actually being stored. It happens from time to time that Amazon ships goods to warehouses that the seller didn’t activate. This might be returns or occasionally low quantities of products. Despite it all, the seller might become liable for taxes in this country and is therefore responsible to keep an overview. The important information, however, might be buried deep in seller central and most sellers definitely don’t check up on this matter monthly. A tool or service provider might help with this issue. Otherwise, carelessness in this case might lead to an account blockage.
Amazon is especially careful in countries where Marketplace Facilitator laws apply, which now include most EU countries, and has its own stringent compliance requirements, often leading to account suspensions for non-compliance with VAT obligations.
Marketplace facilitator laws and tax collection
In many countries, Amazon is especially cautious and therefore quick to block an account when it comes to unpaid sales taxes. This is due to marketplace facilitator laws in these countries that make Amazon liable for collecting and remitting VAT (or sales tax) on certain transactions, rather than the seller. Since this could entail serious consequences for Amazon, they pay special attention to this topic and also ask sellers to provide valid VAT IDs (instead of just a regular tax ID).
In Europe, Germany was one of the first countries to introduce these kinds of marketplace facilitator laws, requiring marketplaces to ensure sellers are VAT compliant. Subsequently, many more EU countries have implemented similar legislation. For instance, from mid-2021, Amazon globally began collecting VAT on imports of low-value goods (under €150 for the EU and under £135 for the UK) when these goods are sold from outside the EU/UK to consumers within, shifting the VAT collection responsibility from the seller to the marketplace.
The reason for these marketplace facilitator laws lies in being able to control for example non-EU sellers better. Many non-European sellers didn’t exactly take a narrow view on sales taxes. That is why Amazon, as well as other sales platforms, is now obligated to make sure that every seller holds a VAT ID and complies with local regulations where storage or other activities warrant it.
VAT obligation in other countries: Impending penalties for violations
What happens if I didn’t pay VAT or accidentally exceed a tax limit? Most of the times, these issues can be resolved fairly easily if the seller know what to do.
VAT in other countries: Impending penalties to consider
When it comes to sales tax in other countries, there are two areas that may entail disadvantages or even penalties.
The one is an indirect extent, for example if compliance requirements for fixed establishments (like FBA warehouses) have not been met, potentially leading to incorrect VAT being charged or declared or even a suspension of an account. This means you’d have a disadvantage due to higher costs or operational disruption.
On top of that, European countries impose sanctions when it comes to unpaid sales tax.
The amount and extent of these sanctions depends on how much is owed and to which country: Several years of high amounts or just a few weeks or months where something went wrong? The respective country of course demands the owed money to be paid, as well as a penalty that may differ, usually a percentage of the amount owed in sales tax.
To give an extreme example: In some cases, Italy charged 230% of the VAT amount owed as a penalty – not including the actual tax which was still pending! It’s worth noting that stricter rules are continuously being introduced; for instance, as of 2025, non-EU sellers storing goods in Italy face new requirements including a €50,000 financial guarantee and mandatory fiscal representation to secure their VAT registration.
Current developments with sales tax liability in other countries
However, things are constantly changing in this area. More and more countries request additional reports on top of the usual preliminary VAT return. Poland for example implemented the SAF-T (Standard Audit File for Tax). This means that Poland has the right to charge a penalty of 500 Zloty, about 100€, for every transaction that has not been reported. The question is rather if the state actually checks for every single sale – but if it would do so in a consequent manner, this could threaten the existence of some, especially smaller, businesses. The EU also introduced an SME VAT simplification scheme effective January 2025 for small sellers, aiming to ease VAT processes for those under certain thresholds.
Forgot to pay sales tax in other countries? This is what to do!
Does that mean a forgotten or unpaid sales tax is the worst case possible? Of course not. In online sales, it happens more often than you think that a seller for example activated the Central European Program without knowing about the consequences, or inadvertently created a fixed establishment by storing goods abroad.
The important thing is to clear everything up in hindsight, to register with retroactive effect in the respective countries and also to retroactively report and pay all VAT. In complicated cases, it might help to consult a service provider.
Here’s an example of how to clean house in the VAT department if you exceeded the previous domestic delivery threshold in Austria or established a fixed establishment for which you were not registered:
As a first step, you have to apply for a tax number in Austria. During this process, you have to name a start date – which is simply the date you should have been registered. This way, you can easily register and pay the outstanding amount of VAT with retroactive effect. In this example, you can even get the unnecessarily paid sales tax in Germany back.
Implementing changes like these afterwards does take up a lot of effort and time, for example when you have to revise invoices that originally stated the wrong VAT – but it is definitely worth it.
The future of Amazon in the EU: expansion, new marketplaces and taxes
In some areas, one can already guess what Amazon is up to when it comes to its future in Europe. Some developments concerning marketplaces or taxes can already be predicted.
Amazon continues to expand its presence across the EU. Newer marketplaces like the Netherlands, Sweden, and Poland have already launched, and further expansions into other European markets are continuously observed. As a next step, it will be possible to warehouse in more locations as Amazon extends its logistical network across Europe.
Scandinavian Markets for Amazon sellers: chances and obstacles
The Scandinavian countries (e.g., Sweden with its launched marketplace) have opened up a plethora of opportunities for Amazon and sellers on the platform: The countries in Europe’s north are very online-savvy and already have strong e-commerce markets. However, as a seller, it’s important to observe how the fulfilment structures will be developed and which registrations are obligated in which countries – especially in the beginning. For example sellers based in Germany are usually not registered for tax in Scandinavian countries. The presence of Amazon warehouses in these regions will trigger local VAT registration requirements for sellers storing inventory there.
Amazon.nl: Marketplace in the Netherlands and Amazon’s approach to new markets
Usually, there’s a similar approach to every expansion of Amazon in another country: First, the marketplace is opened and the FBA warehouses follow only some time later. This means that in the beginning, goods are being shipped from other countries to the new marketplace. A current example can be seen in the Netherlands, where the marketplace launched in 2020 and FBA facilities have since been established. This pattern is likely to repeat with subsequent new marketplaces, such as future expansions in Scandinavia or other untapped European regions.
In the long run, developments like this can be expected in every country in which Amazon decides to expand.
Expansion and new Amazon marketplaces: What sellers have to consider
This means for sellers: Pay attention to the single €10,000 EU-wide distance selling threshold! Of course this is always important, but especially when it’s not even possible to store in a country and therefore shipping across borders is inevitable, such sales will count towards this threshold, after which OSS reporting becomes mandatory. Moreover, as soon as goods are stored in a new country, local VAT registration is triggered irrespective of this threshold.
If you sell only on Amazon, it’s fairly easy to get an overview by simply filtering all of your turnover by sales to private customers in the respective country.
If you sell on several platforms and channels, however, things might get a bit more complicated. All turnover from all channels to the respective country have to be taken into account against the €10,000 threshold for distance sales.
Especially when it comes to new marketplaces and countries, sellers have to be careful and check regularly if goods are already being stored in the new country or if a new warehouse has been opened. Amazon does not necessarily always communicate this ahead of time. And as soon as goods are being stored abroad, you are liable for tax in that country and will need a local VAT registration.
Sellers who do not participate in the Central European Program have to be extra careful: For new marketplaces (and this might also be the cases for the new ones to come in Scandinavia), goods are often shipped from Poland. This way, it might be possible that a seller who usually doesn’t store goods in Poland suddenly finds their stock being stored and sent out from Poland nonetheless. This seller would then be liable for tax in Poland.
Since all this and the respective information in seller central can get confusing quite quickly, it may help to find a tool that shows an overview of where your goods are being stored and where you are liable for tax. (Taxdoo can help with this.)
„`
