Overview

North‑American sellers who want to tap European shoppers, and European merchants eyeing the U.S. marketplace, must master value‑added tax (VAT) obligations and cross‑border compliance. A recent interview with two German tax specialists highlighted the exact steps, deadlines and common traps that can make or break an Amazon international expansion, and why ignoring them can quickly turn revenue into penalties.

Key Points

• VAT registration is mandatory — Any seller that stores products in an EU fulfillment center, regardless of where the business is incorporated, must obtain a local VAT number for that country; a U.S. brand with stock in Amazon’s German warehouse, for example, had to register in Germany before its first sale.
• Marketplace facilitator rules apply — Amazon now acts as the tax collector for most European transactions, automatically adding the correct VAT at checkout, yet sellers still bear the responsibility of filing periodic returns and preserving supporting documentation.
• Compliance deadlines are strict — Missing a quarterly VAT filing can trigger fines up to €5,000 per late return, plus statutory interest on any unpaid tax, meaning a single oversight can erase months of profit.
• Cross‑border customs duties add complexity — When shipping from the United States to Europe, products must be classified under the Harmonized System (HS) code; an incorrect code for a set of kitchen knives inflated duties by 40 % in a recent audit.
• One‑Stop Shop (OSS) can streamline multi‑country filing — If total sales to a particular EU nation stay below that country’s distance‑selling threshold (e.g., €35,000 for Spain), sellers may use the OSS portal to submit a single consolidated return instead of separate filings.
• Data‑driven compliance tools reduce risk — Automated tax platforms that pull sales data directly from Seller Central keep VAT rates current, generate pre‑filled returns and store records in a searchable cloud, cutting manual errors by an estimated 70 %.

How VAT Compliance Works for International Amazon Sellers

1. — Map every EU jurisdiction where you hold inventory, make direct sales, or exceed distance‑selling thresholds; a U.S. seller with pallets in both Amazon.de and Amazon.fr must treat Germany and France as taxable locations.