[Disclaimer: The team at A2X are happy to provide users with technical assistance in applying tax rules to their A2X setup. We are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice. We highly recommend that users seek advice from qualified accountants for their tax compliance.]
Amazon offers the Pan EU FBA program to place your stock in multiple EU countries. This is fantastic for customers as they can receive orders much more quickly in those countries, and it can boost your sales growth in the EU. But as with many things, this growth and customer satisfaction comes at a cost.
By having stock in the EU countries and fulfilment operations, you will need to be VAT registered - a fact Amazon includes in their FAQ.
Neither Xero nor QuickBooks are designed to handle multi-country VAT returns. The process is complex, requiring specific country tax experts to review and prepare each return that complies with the local laws.
An approach many early users of Pan EU services are adopting is to account for their Amazon sales in a standard way into their UK company accounting system, and then as each specific country return is calculated, they are adjusting the total UK sales based on the specific country returns and tax rates.
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