UNDERSTANDING VAT
In EU there is a tax charged on most goods and services (i.e. VAT), the standard rate being 20%. In our case, this would apply to imported shipments, sales, Amazon fees (e.g. advertising), etc.
In the UK our products are Zero-Rated, meaning that any VAT that we are charged there is reclaimable. Note that this is different from being VAT exempt; such items are outside of all VAT schemes and are not taxable to start with.
In the other EU countries (DE, FR, IT, ES) our products are under the standard, 20% VAT scheme. An exception is Netherlands, which charges a reduced 9% VAT on clothing. See the following links for more info on this:
RECLAIMING VAT
Every quarter after we file our tax return, our Global Ecom account rep will inform us that we have VAT that is reclaimable. See the below section (bottom to top) for an example of our account rep informing us that we have reclaimable VAT, and the back and forth on that.
Note that the reclaimable GBP 180.33 in the example below is for the 20% VAT charge on Amazon UK advertising fees: 03/01/20 – 05/31/20. Attached is the three advertising invoices in a folder for reference.
I confirmed with Jamie from Global Ecom that only Amazon UK charges VAT on advertising fees (which is reclaimable for us); the other Amazon EU marketplaces do not. In the case that the other EU marketplaces did charge VAT, Jamie confirmed that it would be reclaimable as well. So we should never be paying VAT on advertising fees in EU.
RECLAIMING VAT - EXAMPLE
From: Jack Clitheroe <jack.clitheroe@globalecommexperts.com>
Sent: Thursday, July 9, 2020 5:16 AM
To: Bobby Matalon <bmatalon@bentex.com>; Joseph M. Benun <jmbenun@bentex.com>
Cc: Patrick Cronin <pcronin@bentex.com>; George Saade <gsaade@bentex.com>; Jack Faiena <jfaiena@bentex.com>; Sam Tawil <stawil@imagikids.com>
Subject: RE: UK VAT RETURN 05 20 NOW DUE FOR FILING
[EXTERNAL]
Hi Bobby,
Thank you for confirming the filing.
I am pleased to advise you that we have submitted your UK VAT return to the UK government, please find attached the copy of the return. £180.33 is reclaimable from HMRC, there is no VAT due to pay.
HMRC will issue a cheque for this refund, we can post this out to you (£10 charge to cover tracked postage), however we can also recommend to open a Payoneer account so that we can advise HMRC to transfer the funds into this, rather than posting the cheque if you would like to proceed in that way. Please find below the links to do this:
http://tracking.payoneer.com/SH15E
If you have any questions please do not hesitate to contact me.
Have a nice day!
Kind regards,
Jack
From: Bobby Matalon <bmatalon@bentex.com>
Sent: 08 July 2020 16:05
To: Jack Clitheroe <jack.clitheroe@globalecommexperts.com>; Joseph M. Benun <jmbenun@bentex.com>
Cc: Patrick Cronin <pcronin@bentex.com>; George Saade <gsaade@bentex.com>; Jack Faiena <jfaiena@bentex.com>; Sam Tawil <stawil@imagikids.com>
Subject: RE: UK VAT RETURN 05 20 NOW DUE FOR FILING
Hi Jack,
I went over the numbers with the team and everything looks good.
Please go ahead and proceed with the filing.
Thanks,
Bobby Matalon
From: Jack Clitheroe <jack.clitheroe@globalecommexperts.com>
Sent: Tuesday, July 7, 2020 11:40 AM
To: Bobby Matalon <bmatalon@bentex.com>; Joseph M. Benun <jmbenun@bentex.com>
Cc: Patrick Cronin <pcronin@bentex.com>; George Saade <gsaade@bentex.com>; Jack Faiena <jfaiena@bentex.com>; Sam Tawil <stawil@imagikids.com>
Subject: RE: UK VAT RETURN 05 20 NOW DUE FOR FILING
[EXTERNAL]
Hi Bobby,
Thank you for sending through your data.
Please see ATTACHED the summary of your VAT filing where £180.33 is reclaimable from HMRC for VAT this quarter.
Please confirm if you are happy to proceed with the filing?
If you have any questions, please do not hesitate to ask.
Kind regards,
Jack