Online marketing in Amazon. Registration and VAT

Online marketing in Amazon.

Registration and VAT

 

Question:

Hello
My query is in the field of online marketing on specific sales of goods through the Amazon online platform on the American market.
To sign a Tarragona relationship with Amazon, as a European citizen, Amazon requires the VAT registration to be provided by the person who is a citizen of the country. If it is not granted a VAT number, then Amazon automatically adds an additional 20% to some fees they collect from each Targotec using their platform.
However, if a VAT number is granted then Amazon does not add value to its charges.
My question is if I, as a Bulgarian individual who wants to sell on the US market, register for VAT and provide it to Amazon, that means I have to charge VAT on every product I sell, which VAT then I import in the NRA?
Why do Amazon require my VAT registration after there is no VAT in the US and I can not justify my customers with a 20% added value on the price of the product?
What exactly are the obligations of the individual in this kind of trade?
What exactly is happening in this complex kind of commercial-financial-international relationship?
I hope that with an expert opinion you will bring light on the matter.
Greetings.

 

Answer:

Hello,

In order to be registered as an individual, you must have a Bulstat registration. To receive such a registration you must be:

- ET

- Farmer

- A person exercising a liberal profession.

E-commerce is not on the list of free professions, and as far as it is clear from your occupation, you are not a Farmer. You can make a registration of ET, but along with some shortcomings, there is one major compared to the registration of EOOD. For any future liabilities at the ET, you are responsible for all your property as a natural person and, as the name implies, your liability is limited to the amount of the company's capital.

This means that in order to conduct business through Internet trading, the most appropriate option for you is to register your EOOD.

VAT registration does not mean that you must necessarily charge VAT.

When you sell goods to EU individuals, then you will charge VAT. If you sell goods to legal entities in the EU then you will not charge VAT.

When you sell to individuals and legal entities outside the EU, then you do not charge VAT.

It is necessary to monitor the turnover of sales to individuals in each EU country, and when you exceed certain thresholds (for each country separately) you are required to register for VAT in the country concerned and pay VAT in that country at their tax rates.

When you buy EU goods from legal entities, you should self-assess the VAT for which you are entitled to a tax credit, provided you are generally registered.

When you purchase goods from non-EU countries and goods enter the country, they should be exchanged and the customs will charge you the VAT you have to pay. For this VAT you are entitled to a tax credit provided that you are registered for VAT on a general basis.

When you receive services from EU legal entities (such as Amazon), then you self-assess VAT. If you are registered in general terms, you are entitled to a VAT credit for the VAT itself charged for the services received from the EU and then you practically do not pay that VAT.

If you provide services to EU legal entities that have VAT registration in their own country, you do not charge and do not owe 20% VAT. If you sell services to individuals and non-registered legal entities in the EU, you charge and owe 20% VAT.

If you provide services to individuals and legal entities outside the EU, you do not charge or owe VAT.

We hope we have been useful.

Greetings.