Amazon EFN and VAT: What Applies When Your Stock Is Only in Germany?

In short

• No warehouse abroad: If the goods stay in Germany, there is no transfer of own goods.
• Up to 10,000 euros net: If all distance sales to other EU countries together stay at or below it in the previous and the current year, German VAT applies.
• Above that: The VAT of the destination country applies; instead of registering in each country, you can declare it in the OSS.

What is EFN, and how does it differ from Pan-EU?

According to Amazon, with Pan-EU FBA you pay local fulfilment fees in all EU countries enabled for storage and cross-border fees (EFN) in the other EU countries. If you store only in Germany, Amazon delivers to customers in other countries from your German stock.

How Pan-EU works for VAT: Amazon Pan-EU FBA and VAT.

What this means for you: With EFN your stock stays in Germany, so the rules for distance sales from Germany apply.

Where does the VAT arise on an EFN sale?

An intra-Community distance sale is a supply of goods dispatched by or for the supplier from one Member State to another. The place of supply is where the goods are when dispatch ends, that is, the customer's country (section 3c(1) UStG).

There is an exception for small sellers. If you are established in one Member State only, and your distance sales to all other Member States together (with certain electronic services to private customers) did not exceed 10,000 euros in the previous calendar year and do not exceed it in the current year, paragraph 1 does not apply. The supply then stays taxable in Germany (section 3c(4) UStG). You can waive this exception; the declaration binds you for at least two calendar years.

Example: You are based in Germany, your stock is only in Germany, amounts in euros net.

The total is below 10,000 euros (and so was the previous year). All three countries stay under German VAT, usually 19% or 7% in your advance return. If another 1,500 euros come in July, the total is 11,000 euros. From the sale that exceeds the threshold, the VAT of the destination country applies to that sale and all later distance sales. The following year then also starts with destination-country VAT, because the previous year was above 10,000 euros (section 3c(4) UStG).

What this means for you: Add up all distance sales to other EU countries net; up to 10,000 euros it stays German VAT.

How do you report EFN sales above the threshold?

Above the threshold you can declare the VAT of the destination countries in the OSS, the special scheme under section 18j UStG. You report once a quarter to the Federal Central Tax Office (BZSt) and do not need to register in each country. The OSS return is in addition to your German advance return (Commission). Deadlines and steps: How to submit an OSS VAT return; the threshold in detail: EU VAT OSS threshold of 10,000 euros.

What this means for you: From the moment you cross the threshold, you report the distance sales quarterly in the OSS if you use it.

When does EFN turn into a warehouse abroad?

If you enable storage in further countries, Amazon may move stock there. Then the Pan-EU rules apply: transfer, VAT ID in the storage country and recapitulative statement. Amazon requires a VAT ID for each country in which goods are stored. So check in Seller Central which storage countries are active before you close the quarter. On reporting the transfer: Recapitulative statement for Amazon FBA sellers.

What this means for you: While only Germany is active as storage country, EFN applies; once a second country is active, Pan-EU applies.

Which mistakes are common?

• Testing the threshold gross. The total of the consideration, so net, counts.
• Looking at one country only. The 10,000 euros apply to all other EU countries together.
• Mixing up EFN and Pan-EU. A transfer only arises when goods are stored abroad.
• Forgetting the previous year. The exception applies only if the previous year was also below 10,000 euros.

What this means for you: Count net, count all countries together and check the previous year.

How VAT GPT helps

1. Upload: You upload the Amazon transaction report (AVTR) as CSV; VAT GPT recognises it by the column TAXABLE_JURISDICTION.
2. Check: VAT GPT sorts the sales: supplies from Germany to Germany into German VAT, cross-border distance sales into the OSS.
3. Send: You send the advance return and the OSS return with VAT GPT Pro via ELSTER.

There is Free (basic features, free of charge), Go (30 days free with all Pro features) and Pro. Sending to ELSTER is part of Pro. You apply for the OSS registration yourself in the BZStOnline portal. Try for Free Now

Frequently asked questions

Do I need a VAT ID in the destination country with EFN? Amazon requires a VAT ID for each country in which goods are stored and, in general, none in the destination shop. With EFN the goods are not in the destination country.

Does the 10,000 euro threshold apply to EFN? Yes, if you are established in one Member State only, for example Germany: the total of all distance sales to other EU countries counts (section 3c(4) UStG).

Is EFN a transfer of own goods? No. A transfer requires that you move goods to your own disposal in another EU country (section 3(1a) UStG).

Do I have to use the OSS? Above the threshold the VAT of the destination country has to be declared; the OSS saves you registering in each country. Taking part is optional (section 18j UStG).

What about small businesses? See Amazon as a small business.

Further reading

• Amazon Pan-EU FBA and VAT
• Amazon OSS VAT: threshold, VAT ID number, reporting
• OSS vs local VAT registration in the EU: which fits when?

Not tax advice: the content does not replace individual advice.

Sources

• Section 3c UStG
• Section 3 UStG
• Section 18j UStG
• Amazon: Pan-European FBA
• European Commission: Guide to the VAT One Stop Shop (March 2021)