No, if you are only selling products through UK Amazon website and have no other business activities. Yes, if you want to set up a company to dispatch goods from your own warehouse. Please note: Local British companies only need to register for VAT if their sales amount is over £85,000(2016/17: £83,000); however, as a foreign company or individual you will need to apply for VAT once you start selling products in the UK, the application process and required documents will be different too.
You can find more information on how to set up a limited company in the UK here.
If you dispatch products from the UK within certain limit, you don’t need to register for an EU Tax Number. Please see the threshold below:
|Germany||100,000 EUR||Italy||35,000 EUR||Spain||35,000 EUR||United Kingdom||70,000 GBP|
If the sales amount is over the threshold, you must apply for a local VAT number in the EU country.
No, if you have warehouses in other EU countries, you must apply for a local Tax Number.
Should I use EFN or Pan?
EFN (European Fulfilment Network) – even your products are stored at a fulfilment warehouse in a certain country, you can still sell them through other channels. For example, your products are stored at UK FBA warehouse, you can sell them on Amazon.de as well.
Pan (Pan-EU Amazon program) – your products are stored at 7 FBA warehouses in Europe, this means you will need to apply for Tax Number in these 7 countries.
Each country’s VAT application and returns process are different. For example, you need to declare 13 times a year in Germany, 4 times a year in Italy. In France and Spain, it will depend on the sales amount. Therefore, if your sales amount in Europe is less than distance selling thresholds, we suggest you to use EFN program, it is also the cheapest way to register for VAT and make returns in the UK compare to the other countries.
VAT Rate in Different Countries:
The above information and calculations are for illustrative purposes only. No liability is accepted by O’Brien S & Co Ltd for any actions or losses from investment in reliance on the information and calculations. Consult a qualified professional financial advisor before making any financial decisions. O’Brien S & Co Ltd holds the copyrights in all materials on the website. All rights reserved.