How Amazon's VAT Calculation Service Changed for B2B Sales

In brief: Amazon's VAT Calculation Service (VCS) issues VAT invoices on sellers' behalf, and its rules for business-to-business (B2B) sales changed several times. The most significant update, announced on 24 July 2024, took effect on 7 August 2024: VCS began judging where you're established from your registered business address, not the address linked to your VAT number. Earlier updates added Italian e-invoice reporting (2022) and a 0% domestic reverse charge on high-value electronics sold to businesses (2023). From 1 January 2025, VCS invoice numbers became 14 characters long.

Amazon VAT Calculation Service B2B timeline

Effective	Change
25 July 2022	Italian SDI e-invoice reporting extended to goods shipped out of Italy to other countries, whether to businesses or consumers, for sellers with an Italian VAT number who are physically present in Italy
7 February 2023	0% product-related domestic reverse charge on certain electronics (phones, chips, laptops, tablets, e-readers, games consoles) in domestic B2B shipments above roughly €5,000, in the UK, Germany, Austria, Czech Republic, Denmark, Latvia and Romania
7 August 2024	Establishment decided by registered business address; Croatia dropped its non-resident reverse charge, so Croatian VAT applies to domestic sales
1 January 2025	VCS invoice numbers shortened to 14 characters, still unique and sequential

The August 2024 change in practice

If your registered business address is in one country but your VAT number's address is in another, VCS treats you as not established in the VAT number's country. In countries with a non-resident reverse charge, your domestic B2B sales there then carry no VAT on the invoice, and the business buyer accounts for it. A month later, Amazon refined this again for the UK, Spain and Italy using tax authority data — see the September 2024 establishment update.

A worked example

A UK-established seller sells laptops worth £6,000 before VAT to a UK business in 2023. Under the electronics reverse charge the VCS invoice shows £0 VAT instead of £1,200 (20% of £6,000). The buyer, not the seller, accounts for the VAT.

What it means for your bookkeeping

• Not every B2B sale carries VAT. Reverse-charge sales in your settlement should be posted with a reverse-charge or zero-VAT treatment, not standard rate. Take the treatment from the VCS invoice.

• Check your addresses. Since August 2024, a mismatch between your business address and VAT number address changes the VAT on business orders. Keep both accurate.

• Invoice numbers in your records. If you match Amazon invoices to orders by number, the 2025 format change needed allowing for — older and newer numbers look different.

• Get advice for edge cases. Reverse charge rules vary by country; agree the approach with your accountant.

• Getting the codes right. B2B lines need the treatment shown on the VCS invoice — see Amazon VAT tax codes in Xero.

How TrueBooks helps

TrueBooks posts every Amazon sale and refund to Xero with the right UK VAT treatment, and its VAT audit view shows the totals by HMRC box so unusual B2B lines stand out. See the Amazon Xero integration.