E-commerce with e-Residency Hub04. February 2020
e-Residency Hub provides full accounting services for companies selling their goods on Amazon or other e-commerce platforms. The information below is based on the example of Amazon. In case you wish to sell your products using another e-commerce platform, please get in touch with us to discuss the details of our services to you.
During the process of company establishment, if you indicate that your business activities will include selling goods online, you will be asked to provide us with some extra data, which will help us to understand your business better and provide you with our services.
e-Residency Hub services to you
e-Residency Hub handles your company’s accounting. As e-commerce activities usually require you to submit VAT declarations in other countries of the European Union, we cooperate with a trusted third-party service provider to help you with pan-Europe VAT filings. Alternatively, you can order such services directly from Amazon.
Our service to you includes
- Booking your aggregated sales data, based on the VAT reports generated by our VAT partner or Amazon VAT
- Preparing and submitting your company’s Estonian tax declarations if applicable
- Preparing and submitting your company’s annual report to the Estonian Business Registry
- Collecting data from our pan-european VAT service providers and incoporating that into your company’s bookkeeping
Value Added Tax
Value Added Tax (VAT) is a topic which makes e-commerce operations in Europe different from many other types of businesses. You as an Amazon seller will need to register for VAT in the country(ies) in which your goods are being stored by Amazon. It is also necessary to keep track of your sales volumes in diferent EU Member States – once you reach a certain limit of sales in any given year, you will be required to also register for VAT in those countries as well and start paying VAT there.
As a seller on Amazon, your company does not need an Estonian VAT number. Instead, you need a VAT number in the country in which your goods are stored by Amazon. In case you choose to store your goods in several Amazon warehouses in several European countries, you need to apply for a VAT number in each of these countries. You will also need to submit monthly or quarterly VAT declarations in all the countries from which you have a VAT number.
It is important to keep in mind that each additional VAT number will create additional set-up costs and regular costs for you. These costs will occur because your VAT service provider will need to submit tax filings in each separate country and you will be required to pay VAT in each country.
Please read carefully the FAQ assembled by amazon on VAT issues