Value Added Tax Number

Selling into European markets through Amazon.co.uk, Amazon.de, or any other EU marketplace means dealing with Value Added Tax, and that starts with obtaining a VAT number. It’s a unique identifier issued by a country’s tax authority that registers you as a business required to collect and remit VAT on sales made within that jurisdiction. Without one, you can’t legally sell to consumers in most European countries, and Amazon won’t let you use their European fulfillment network.

How VAT Works in Practice

VAT is a consumption tax applied at each stage of the supply chain. Unlike U.S. sales tax, which is collected only at the final point of sale, VAT is charged every time goods change hands. The manufacturer charges VAT to the wholesaler. The wholesaler charges VAT to the retailer. The retailer charges VAT to the consumer. At each step, the business remits the VAT it collected minus the VAT it paid on its own purchases. The end consumer bears the full tax burden.

For an Amazon seller, this means you charge VAT on every sale to a European customer. The rate varies by country: 20% in the UK, 19% in Germany, 21% in France, 22% in Italy. If you sell a product for 50 euros on Amazon.de, roughly 7.98 euros of that price is VAT (calculated as 50 divided by 1.19, then subtracted from 50). You’re responsible for collecting it and filing periodic VAT returns with the German tax authorities.

When You Need a VAT Number

You need a VAT number in any country where you store inventory or exceed that country’s distance selling threshold. Amazon’s Pan-European FBA program moves your inventory across multiple countries to position products closer to buyers. If Amazon stores your goods in a warehouse in Poland, you need a Polish VAT number, even if you never intended to sell there directly. The physical presence of your inventory triggers the registration requirement.

The UK has its own post-Brexit VAT rules. Since January 2021, Amazon collects and remits VAT on behalf of sellers for all B2C sales of goods valued at or under 135 GBP shipped from outside the UK. But you still need a UK VAT number to import goods into the country and to handle B2B transactions.

Germany requires all marketplace sellers to have a VAT registration and a tax compliance certificate (Bescheinigung nach 22f UStG). Without this certificate on file, Amazon will deactivate your German selling account. The German Bundeszentralamt fur Steuern (Federal Central Tax Office) issues it, and the application process can take 8 to 16 weeks.

Registration Process

Getting a VAT number in a foreign country isn’t as simple as filling out one form. Each country has its own tax authority, its own forms, its own language requirements, and its own processing timeline. You’ll typically need to provide proof of business registration in your home country, a description of your business activities, details about your expected sales volume, and sometimes a fiscal representative based in that country.

Most Amazon sellers use a VAT compliance service like AVASK, Taxomate, hellotax, or SimplyVAT. These services handle the registration filings, prepare your periodic VAT returns, and ensure you’re compliant across multiple jurisdictions. Costs typically range from $300 to $600 per country per year for registration and ongoing filing. It sounds like a lot until you compare it to the penalties for non-compliance: Germany alone can impose fines of up to 50,000 euros for failure to register.

VAT and Your Import Process

VAT also applies when goods enter a country. Import VAT is charged at the border, calculated on the customs value of the goods plus any duties owed. If you import $10,000 worth of products into the UK, you’ll pay 20% import VAT ($2,000) at the point of entry. This amount is recoverable on your next VAT return as “input VAT,” but you need to be registered and filing returns to claim it back. Sellers who don’t reclaim their input VAT are effectively paying a 20% tax on their cost of goods with no recovery.

Practical Impact for U.S.-Based Sellers

If you’re a U.S.-based seller expanding into Europe, the VAT requirement adds real operational complexity. You need registrations in each country where you store inventory, quarterly or monthly filing obligations, and accurate record-keeping that separates your European sales by country. Your accounting software needs to handle multi-currency transactions and varying tax rates.

This is one area where working with a 3PL that handles international prep can simplify things considerably. A prep center that ships to Amazon’s European fulfillment centers understands the documentation requirements, the labeling differences between U.S. and EU markets (CE marking, EU-compliant packaging), and the customs paperwork that needs to accompany your goods across borders.