The EU VAT Ecommerce Package on Amazon (July 2021)

In brief: the EU VAT ecommerce package reached Amazon on 1 July 2021, when all 27 EU countries changed how VAT works on online sales to consumers. For sellers established outside the EU — which, after Brexit, includes UK businesses — Amazon became responsible for collecting the VAT on consumer (B2C) sales in two cases: goods sent from outside the EU in consignments worth up to €150 (the Import One-Stop Shop, IOSS), and goods of any value sent from stock held inside the EU. For EU-established sellers, the old distance-selling thresholds were scrapped: VAT became due in the customer's country, reported through the One-Stop Shop (OSS).

EU VAT ecommerce package on Amazon: who collects VAT

Seller and sale	Who accounts for EU VAT
Non-EU seller, B2C, shipped from outside the EU, up to €150	Amazon (IOSS)
Non-EU seller, B2C, shipped from EU stock	Amazon
EU seller, cross-border B2C	The seller, via OSS, at the customer country's rate
Any seller, sales to VAT-registered businesses	The seller, under normal VAT rules

What didn't change

Amazon was clear that the new rules didn't remove VAT registration duties. Holding stock in an EU country can still require a VAT number there, and B2B sales stay taxable under the normal rules, whether or not you use OSS or IOSS. Amazon also warned that parcels sent over the Post Office counter might not be declared correctly under IOSS, and that Royal Mail recommended its Click & Drop service instead.

A worked example

A UK seller ships a €40 phone case from the UK to a customer in Ireland through Amazon.de. Because the seller isn't established in the EU and the parcel is under €150, Amazon charges the customer Irish VAT at the checkout and pays it through IOSS. The seller's settlement shows the VAT collected and then withheld by Amazon, so none of it is theirs to pay over.

What it means for your bookkeeping

• VAT Amazon collects isn't yours. Where Amazon is responsible, the VAT appears in your settlement and is then withheld. Book the sale net of that VAT — see Marketplace Facilitator VAT.
• EU stock still needs attention. Stock held in EU warehouses can still mean VAT registrations and returns; take advice.
• Business sales are different. Sales to VAT-registered EU businesses fall outside these schemes.
• Later change: since July 2026 a €3 EU customs duty applies to low-value parcels — see the €3 duty.

How TrueBooks helps

TrueBooks detects Marketplace Facilitator VAT orders and exports by ship-to country, posts them to Xero with the right UK treatment, and keeps each marketplace in its own currency. It doesn't file VAT returns. See the Amazon Xero integration.