Amazon seller news · VAT & tax

Amazon's VAT Calculation Service Now Works Out VAT Per Shipment

Announced by Amazon on 8 April 2026, effective 1 June 2026. Expect small differences on orders with more than one unit.

Last updated: 19 September 2026

In brief: Amazon's VAT Calculation Service (VCS) used to calculate VAT unit by unit. Since 1 June 2026 it calculates VAT on the total of each invoice, separately for each tax rate. Amazon made the change to meet European e-invoicing requirements. For single-unit orders nothing visible changes; for multi-unit orders the VAT on the invoice can differ by a penny or so from the old method.

What VCS is

VCS is Amazon's optional service for VAT-registered sellers. It works out the VAT on each order and issues the VAT invoice to the customer on your behalf. It is also why most UK orders show a separate Tax row in your settlement report.

How the new calculation works

Amazon uses one of two methods, depending on where the order was placed:

Normal Amazon website: the VAT is taken out of the VAT-inclusive total. On a multi-unit order this can leave individual unit prices (before VAT) slightly uneven.
Amazon Business: Amazon first works out the price before VAT for one unit, then calculates VAT on the combined price before VAT for each rate.

The method depends on the website the order came through, not on whether the buyer is VAT-registered.

A worked example

A customer buys three units at £9.99 each, including 20% VAT. Calculated unit by unit, each unit carries £1.665 of VAT, rounded to £1.67 — £5.01 in total. Calculated on the whole invoice, £29.97 × 1/6 = £4.995, rounded to £5.00. The one-penny difference comes purely from where the rounding happens.

What it means for your records

Your VAT is now based on invoice totals. This is fine for HMRC, which allows VAT to be rounded on the invoice total. What matters is that your records follow the VAT invoices Amazon actually issued.
Don't "fix" penny differences. If a spreadsheet recalculates VAT per unit it will now disagree with Amazon by a few pennies on multi-unit orders. Amazon's invoice is correct; change the spreadsheet, not the books.
Settlement Tax rows follow the new method for orders from 1 June 2026, so a quarter that spans the date mixes both methods.

Do you need to do anything?

No action is needed to keep using VCS. If you're not enrolled, this is a good moment to consider it: it makes the Tax rows in your settlements much more reliable, which helps you separate UK sales from zero-rated exports.

How TrueBooks handles it

TrueBooks posts each settlement to Xero as VAT-inclusive totals by tax code, so Xero works out the VAT on those totals — the same invoice-level approach VCS now uses. See which tax codes each line uses.

Source: Amazon Seller Central announcement, 8 April 2026. TrueBooks is independent and not affiliated with Amazon. General information, not tax advice.