What FBA-specific tax issues you face
- Marketplace facilitator VAT - Amazon collects and remits VAT on B2C sales to EU consumers in many cases, but B2B and certain categories work differently.
- Pan-EU FBA inventory - if you use Amazon's Pan-EU FBA, your inventory moves between UK, DE, FR, IT, ES, PL, CZ warehouses. Each country may trigger VAT registration.
- US sales tax - if you sell on Amazon US, marketplace facilitator rules cover most state sales tax, but income tax nexus and BEAT/GILTI rules can apply for larger sellers.
- Inventory cost basis - tracking landed cost across multiple shipments, currencies, and storage locations is complex without specialist tooling.
- Settlement reconciliation - Amazon settlements bundle sales, refunds, fees, FBA storage, advertising, and reimbursements. Specialist tools (A2X, Link My Books) automate this.
What good FBA accounting looks like
- Specialist middleware connecting Amazon Seller Central to Xero/QuickBooks - typically A2X or Link My Books.
- EU VAT strategy - either OSS (One Stop Shop) for distance selling, or country-specific registrations where Pan-EU FBA stores your inventory.
- Inventory and landed cost tracking - cost of goods sold reflecting actual landed cost, not just supplier invoice.
- Settlement reconciliation - every Amazon settlement reconciled against the orders it represents.
- Advertising spend tracking - PPC, Sponsored Products, Sponsored Brands - all categorised correctly.
- Tax planning - structure decisions (Ltd vs sole trader), R&D claims if you build proprietary tech, IP holding structures for larger sellers.
Indicative FBA fees
| Stage | Service | Indicative monthly |
|---|---|---|
| UK-only FBA, <£100K | Accounts + CT + bookkeeping + Amazon-Xero integration | £120-£200 |
| UK + EU Pan-EU FBA | Full service + EU VAT + OSS | £250-£500 |
| UK + EU + US | Full service + multi-jurisdiction + transfer pricing | £500-£1,200 |
FAQ
Frequently asked questions
Do I need to register for VAT in every EU country I sell in?+
Not necessarily - the OSS scheme lets you handle EU distance sales VAT through a single registration in your home country. BUT if you store inventory in another EU country (Pan-EU FBA does this), you typically need a VAT registration there. A specialist will determine your specific obligations.
How does Amazon's marketplace facilitator VAT work?+
For B2C sales below certain thresholds to EU consumers, Amazon collects and remits VAT to each member state. You receive net of VAT. For B2B sales (where the buyer provides a valid VAT number), the rules differ. Specialist accountants ensure you handle this correctly in your books.
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