Amazon Now Uses Tax Authority Data to Decide Your VAT Establishment

In brief: Amazon's VAT Calculation Service (VCS) has to know whether you're established in a country to charge VAT correctly on sales to business customers. From 11 September 2024, for the UK, Spain and Italy, information from the tax authority — the address it holds for you, or the format of your VAT number — overrides the business address you entered in Seller Central. If that data says you're not established there, your domestic sales to VAT-registered businesses in that country use the reverse charge: the invoice shows no VAT, and the business customer accounts for it.

How Amazon decides VAT establishment

Normally a UK seller charges UK VAT on a sale to a UK business. When the seller isn't established in the country, some countries shift the obligation to the business customer. The seller's invoice then carries no VAT, and the buyer declares the tax itself.

Who this affects

Your situation	Effect
UK business selling to UK businesses, and HMRC's records show you as UK-established	No change — UK VAT charged as normal
Registered in the UK (or Spain/Italy) but established elsewhere	Domestic B2B sales in that country may now show no VAT under the reverse charge
Seller Central address differs from the tax authority's records	The tax authority's version wins

What it means for your bookkeeping

• Check your B2B invoices. If Amazon starts issuing invoices without VAT on domestic business sales, your records need to show them as reverse-charge sales, not standard-rated ones — otherwise you'll overstate the VAT you owe.

• Match your records to the tax authority's. An out-of-date address with HMRC or a VAT number in an unusual format can change how Amazon treats your sales. Keep them consistent.

• B2C sales are unaffected. This only changes sales to VAT-registered business customers.

• Take advice if you're non-established. Whether the reverse charge applies to you depends on the country's rules and your own circumstances.

• Getting the codes right. Reverse-charge sales need their own treatment in Xero — see Amazon VAT tax codes in Xero and which VAT return boxes they hit.

How TrueBooks helps

TrueBooks posts your Amazon sales to Xero with the VAT treatment shown in each settlement, and its VAT audit view shows the effect on each box of your UK return. See the Amazon Xero integration.