Blog » Amazon Ends Call-Off Stock: Sellers Must Now Register for VAT
Amazon Ends Call-Off Stock: Sellers Must Now Register for VAT
Brief Explanation of the Call-Off Stock Program on Amazon
The call-off stock program on Amazon allowed vendors to store their goods in consignment warehouses across various countries, streamlining the order fulfilment process and ensuring faster delivery to customers. This system provided a significant advantage: exemption from Value Added Tax (VAT) settlement for goods stored in consignment warehouses. Vendors only had to pay VAT when the goods were sold and shipped to the customer, aiding in cash flow management and reducing administrative burdens.
Brenda Varela
Last Updated on 10 July 2024
To participate, vendors had to maintain detailed records of merchandise in consignment warehouses, including stock levels, location, and movement of goods. Regular updates and audits by Amazon were required, and vendors had to observe the maximum storage period for their goods, which varied by country. Failure to comply could result in penalties or removal from the program.
Amazon’s Decision to Discontinue Call-Off Stock
Amazon Ends Call-Off Stock program, necessitating changes in how sellers store and manage their inventory in the European Union (EU). By August 1, 2024, sellers must activate Pan-EU FBA through VAT registration in relevant EU countries to continue storing inventory and receiving domestic FBA fees. This shift aims to streamline tax compliance and inventory management across Europe.
Impact on Sellers
The discontinuation of the call-off stock (Amazon Ends Call-Off Stock) program means sellers will face new compliance requirements and potential cost increases. Sellers must now:
Register for VAT in Relevant EU Countries: This involves obtaining a VAT registration number (VRN) for each country where inventory is stored. Failure to register can result in severe penalties, including fines and back taxes.
Adhere to New Inventory Declaration Requirements: Sellers must declare the value of unsold goods at the end of each calendar year and pay applicable taxes. This ensures compliance with local tax regulations and prevents tax evasion.
Enroll in Pan-EU FBA: This program requires a VRN and allows sellers to store inventory in multiple European countries, facilitating faster delivery and better customer service.
Transition Period and Guidelines – Amazon Ends Call-Off Stock
Amazon has provided a transition period from August 1 to November 1, 2024, for sellers to switch to Pan-EU FBA. Sellers must obtain a VRN by November 1, 2024, to qualify for financial incentives and avoid disruptions in their operations. During this period, sellers should:
Ensure Active Seller Accounts in All Shops: Maintain compliance with Amazon’s seller policies and performance standards.
Deposit a Verified German VAT Identification Number: This proves compliance with German VAT regulations.
Use Amazon’s VAT Calculation Service: Simplifies VAT calculations and ensures accurate submissions to tax authorities.
Maintain Active Offers for COS Eligible Products: Ensure eligible products meet Amazon’s criteria.
Alternative Solutions for Sellers
Pan-EU FBA Option – Amazon Ends Call-Off Stock
Pan-EU FBA is an alternative program that simplifies selling across Europe by allowing sellers to store inventory in Amazon fulfillment centers located in various countries. Amazon handles storage, packaging, and delivery, providing faster shipping and improved customer satisfaction.
Benefits of Pan-EU FBA
Wide Customer Base Access: Reach customers across Europe with faster delivery times.
Simplified Inventory Management: Send inventory to a single fulfillment center; Amazon distributes products as needed.
Streamlined Operations: No need to manage multiple inventory locations or logistics complexities.
Other Seller Central Programs
Amazon Seller Central offers various programs to help sellers manage their inventory and orders more effectively. These include:
Multi-Channel Fulfillment (MCF): Allows sellers to use Amazon’s fulfillment network for orders placed on other platforms.
European Fulfillment Network (EFN): Lets sellers store inventory in one country and fulfill orders across Europe, simplifying logistics.
Conclusion
The end of Amazon’s call-off stock program marks a significant change for sellers, requiring them to adapt quickly to new VAT registration and inventory management requirements. By leveraging programs like Pan-EU FBA and exploring other Seller Central options, sellers can continue to thrive in the European market.
Book a free consultation
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For seamless transition and compliance, consider partnering with hellotax for expert VAT registration and management services. Our team will ensure you meet all requirements and make the most of Amazon’s Pan-EU FBA program.
Contact hellotax today to get started and ensure your business remains compliant and competitive in the evolving e-commerce landscape.
