According to the announcement issued by the Amazon platform, starting today, the Amazon European station will enable a new value-added tax calculation method for EU B2B-specific products, and will apply to product-related domestic reverse taxation ( 0% value-added tax ) for sales that meet the following conditions )

1. Sales of electronic products are subject to domestic reverse taxes and fees related to the product. Taxes on these products vary by country , such as mobile phones, computer chips, e-readers, laptops, tablets or video game consoles ;

2. B2B sales in Europe ;

3. The value of the shipment is above the applicable threshold (usually around EUR 5,000);

4. Sold in the UK, Germany, Romania, Czech Republic, Austria, Denmark or Latvia.

The following is the original text of the announcement

So what is the algorithm of reverse taxation?

[ Non-resident domestic reverse taxation calculation ]

Countries currently implementing the non-resident reverse taxation mechanism include Belgium, Croatia, France, Italy, the Netherlands, Spain, Sweden, Portugal and Slovakia.

First of all, the seller's B2B transaction needs to meet the following conditions

⑴The transaction takes place in the same country (e.g., the place of dispatch and the place of receipt are the same)

⑵The customer is set up for VAT purposes and has a VAT registration number in the same country as above

⑶ The seller also has a VAT registration number in the same country as above , but has established an associated address in a different country for VAT purposes.

As an example, a seller with an Italian VAT registration number, an address in Germany, and a listing price of €12.00 on Amazon.it. Seller ships items from Italy and sells items to Italian B2B customers (VAT registered) located in Italy.

The seller's VAT rate for this transaction is 0% (reverse taxation for non-residents)

Calculation of commodity price excluding VAT : € /(1 + 0.22)= € 9.84 (base price for calculating domestic reverse charges)

· Final VAT inclusive price calculation (including applicable VAT): € 9.84*(1 + 0.00) = € 9.84

[ Product-related domestic reverse charge calculation ]

First of all, the seller's B2B transaction needs to meet the following conditions

⑴The transaction takes place in the same country (for example, the place of dispatch and the place of receipt are the same)

⑵ Both the seller and the customer have a VAT registration number in the same country as above

⑶ Sales of products related to the above-mentioned domestic reverse charges of the same country.This may include: mobile phones, computer chips, tablets, laptops, personal computers or video game consoles

As an example, a seller has a German VAT registration number and sells a mobile phone on Amazon.de for €750. Seller ships from Germany and sells 8 of the phones to a B2B customer in Germany (customer is VAT registered). All 8 mobile phones will be sent at one time.

· The seller's VAT rate for this transaction is 0% (based on the domestic reverse taxation of the product)

· Total VAT item price calculation (price seen at checkout): €750*8=€6000

· Calculation of commodity price excluding VAT: €/ (1 + 0.19)= €630.25

· Total VAT excluding freight calculation €630.25*8 = €5,042.02 (base price for calculating domestic reverse charges).

· Final VAT inclusive (including applicable VAT) price calculation. This is the price reflected on the invoice: €5,042.02 * (1+0.00) = €5,042.02

If the calculation of VAT on the European website is complicated, the seller can choose to join the platform’s VAT calculation service management. Amazon’s free VAT calculation service will automatically generate a commercial invoice and display the price excluding VAT on the quotation. Sellers can activate the function of VAT calculation service. To activate this function, sellers need to submit at least a valid EU VAT registration number to register for Amazon VAT calculation service. If the seller needs to register for European VAT, you can leave a message by private message.

The above is the sharing of cross-border tax information today. For more cross-border tax knowledge, please pay attention to Wanliqing’s cross-border public account!