“Pan-European – Fulfilled by Amazon” – functioning and obligations

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Amazon, the undisputed giant of E-commerce and preferred platform for distance selling, now offers its professional sellers the “Fulfilled by Amazon-Pan-European” service.

Most of the world’s population has been buying on the internet via online stores for over 20 years already. Many companies quickly turned to online business, opening up new prospects for international development.

Over the years, we have seen the emergence of many e-commerce key players offering solutions that facilitate businesses.

These service providers offer various technical solutions with the aim of optimising the daily management of “online” shops.

In 2022, it has never been easier to create an e-commerce store, set up means of payment, integrate the automation of an accounting software, plan advertising campaigns or integrate services of a marketplace opening the doors to international sales.

What is a marketplace?

It is an internet platform allowing sellers, generally professionals, to offer their products or services to individuals and businesses.

Through its technology, marketplaces offer paid services such as affiliation, advertising or even training. It can also make a profit via commissions based on the turnover of the sellers.

Through marketplaces, affiliated merchants have the possibility of accessing the traffic of internet users. This new visibility allows sellers to attract new visits, offer their products and increase their sales via the marketplace.

As for buyers, they have access to a range of products that can be compared and ordered from anywhere in the world, at any time of the day or night.

How does the sales process take place via a marketplace?

Once the basket has been checked out and payment has been made, the shipping process, logistics organisation and delivery monitoring begin. These fairly complex phases require significant resources in the operational organisation of distance selling. These steps are generally taken care of by the specialised departments of the marketplaces, facilitating the work of the sellers.

Companies wishing to sell their product ranges internationally now have multiple marketplaces and service providers that can support them in their ambitions and business strategies.

Amazon, a turnkey logistics solution?

Amazon offers two inventory management solutions

Amazon, with its potent organisation, has opened multiple logistics centers around the world, with the aim of offering sellers the management of their stocks without them being bothered by the operational management of shipments.

Amazon offers two inventory management solutions. The first one, very simple, is called the European distribution network and allows affiliated sellers to store their goods locally via the logistics units of the marketplace. The delivery will therefore be quick if it is local. Cross-border deliveries, on the other hand, will take longer.

In order to meet the requirements of customers, Amazon offers a second option called Pan-European.

What is the “Fulfilled by Amazon – Pan-European” service?

Through the opening of the various logistics platforms, Amazon offers storage and distribution in several countries of the European Union (Germany, France, Italy, Spain, Poland, Czech Republic, Sweden and the Netherlands), with a single access and centralised via their platform. It is extremely tempting for affiliated sellers to place their products in countries where Amazon allows storage.

As the products are already in the country of delivery, buyers receive their parcels very quickly, sometimes within a day of their basket’s checkout, a huge advantage for sellers who choose to use Amazon Pan services. -European.

Hundreds of thousands of companies profit from Amazon’s ancillary services, seeing their sales increase, which can cause their international turnover to explode.

Please do note that, as customers are generally private individuals, it is important to remain vigilant in the operational management of cross-border flows and the choice of invoicing of VAT rates. The collection of VAT must be done by the European country where the product was delivered and consumed.

Sellers, be extremely vigilant with the applicable VAT rates!

You are a French company, you sell on Amazon and you use the logistics services of the marketplace. You supply from France the various Amazon distribution centers located in France. The marketplace takes care of the distribution on your behalf in France but also in other countries of the European Union such as Belgium, Luxembourg or Germany.

Above all, do not neglect intra-Community compliance, and more particularly the management of VAT invoicing via the OSS EU regime.

Do you also sell through distribution centers thanks to Amazon’s Pan-European?

Selling through a fulfillment center thanks to Amazon’s Pan-European.

As the goods have previously been transported to another country of the European Union, there are declarative obligations of exit and entry. During local sales made through the Pan-European, local VAT must be applied via an invoicing mentioning the VAT number of the country of delivery.

Sale via the Pan-European: example with a Belgian company

A Belgian company using the Pan-European ships goods to marketplace stocks in Germany, France and Spain. A few days later, a German customer orders via the app and has the goods delivered the next morning. The goods will be delivered from the stock in Germany. The Belgian company will have to charge the German VAT rate via a VAT number in Germany activated beforehand.

Orders are pouring in, the Amazon distribution center delivers locally daily to individuals in 3 countries. The Belgian company, in addition to the VAT number in Germany, will have to obtain VAT numbers in France and Spain in order to declare the VAT collected and pay it to the local authorities for the sales made from the stocks in these countries.

New regulation of the e-commerce VAT package

Since the implementation, on July 1, 2021, of the new e-commerce VAT regulations package, all service providers facilitating e-merchant activities, including marketplaces, have new reporting obligations. European tax administrations have become extremely vigilant and are taking advantage of data automation to cross-reference information in order to stop massive VAT fraud.

Nowadays, it is much easier to launch an e-commerce store, but do not forget the particularities of intra-Community sales and their regulatory implications.

ASD Group supports you!

Our e-commerce experts support you in all compliance studies and flow validations, as well as in the activation of intra-community VAT numbers and the operational management of local and Intrastat and VAT declarations. Don’t hesitate to contact them!

ASD Group, your privileged interlocutor expert in international development, VAT and international taxes, customs operations, social regulations and business strategy.

ASD Group works for you using the latest software technologies available and the advanced skills of our teams. Contact us for more information!

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