1. Trying to figure out VAT yourself
Unless you’re a tax expert, don’t try to handle this on your own.
“As soon as you know you’re interested in selling in Europe, hire a European tax specialist,” Dan says. “VAT is complex. You can waste countless hours and end up just as confused trying to figure it all out just reading information online. For something this complex, hire someone who is passionate about VAT and will ensure your European taxes are well managed.”
2. Asking your US accountant about VAT
Most US accountants are not VAT experts. Even asking them for general advice about VAT is not recommended.
“A lot of our sellers say their US accountant scared them off selling in Europe because of VAT,” Diana says. “Talk to a European tax specialist. They’ll be able to give you better advice in understanding your requirements and options.”
3. Hiring a VAT expert who doesn’t understand Amazon in particular
Not all VAT experts understand the specific requirements of Amazon Europe sellers.
“Previously, we hired a VAT specialist service that seemed to have less knowledge of Amazon in particular,” says the seller whose European sales top $900,000 annually. “That ended up hurting us in the long run. We had to spend more time gathering tax data for them and they made more errors. Find a specialist who has done VAT for Amazon-specific companies, as it is a fairly unique business model that most VAT experts may not understand completely.”
4. Ignoring or delaying your VAT registration
Doing so can lead to your account being suspended.
“Sellers might inadvertently send their inventory to the UK without the required VAT registration, which can get your account suspended.” says Lavina of the European Marketplace team. “Make sure you’re VAT registered before you send any inventory.”
Given the potentially long processing time, begin VAT registration as soon as you know that it’s required.
Neil of Regional Express says the average time to get a VAT number in the UK is currently 10 to 12 days. “The processing time can increase during peak times,” he says.