Amazon is verifying their sellers’ VAT registration information for EU Member States, Norway, and Switzerland. 

This is in line with the DAC7 Directive (Directive on Administrative Cooperation – 7th Amendment), an EU directive requiring online marketplaces within the EU (such as Amazon) to collect, verify, and report VAT or tax and financial data of sales partners residing in the EU, regardless of which marketplace they sell on.

Sellers must ensure that the VAT registration information provided in their account exactly matches the registration name and address stored in the relevant tax authority’s database and aligns with at least one of the following: legal address, VAT group representative, tax representative, tax authority, or service provider address.

Separately, Amazon is also required to verify similar details for businesses registered for UK VAT. 

If not, your selling permissions may be suspended until you are able to provide the correct information.  Sellers are therefore advised to conduct a self-review immediately!

Why has the European Union implemented DAC7?

The main goal of DAC7 is to enhance transparency and tax fairness in activities facilitated by digital platforms within the EU. 

The Directive mandates the automatic exchange of information about sellers on digital platforms, covering a broad range of services and goods. 

DAC7’s impact extends beyond traditional financial institutions to the rapidly growing digital economy:

• Scope: DAC7 applies to a wide range of digital platforms, including those facilitating property rentals, personal services, goods sales, and vehicle rentals.
• Information Exchange Requirements: Platform operators are required to report detailed information about sellers, including their identity, income, and the nature of services or goods sold.
• Compliance Obligations: Platform operators must comply with strict due diligence and reporting requirements, ensuring timely and accurate information exchange.

How is Amazon complying with DAC7?

As an online marketplace, Amazon has implemented several measures to comply with the Directive.

This includes:

1. Collecting additional information from EU-based sales partners, such as local Tax Identification Numbers (TINs) and information about any permanent establishments overseas.
2. Verifying the collected information with relevant institutional databases.
3. Reporting sellers’ financial transactions, fees, payments, bank details, and due diligence data to the relevant tax authorities

Amazon is obligated to deactivate non-compliant marketplace accounts until sellers provide the required information, and it is verified within the relevant databases.

Sellers should therefore pay extra attention to tax compliance, ensuring they register for VAT in their target sales countries and regularly self-audit to address any potential tax and product compliance risks.

More information can be found on Amazon’s news update here.

How can sellers stay compliant?

1. Ensure that the VAT registration information in your seller account matches the legal name and address stored in the official tax authority database.
2. The address associated with your VAT registration number in the seller account must align with one of the following:
   • Legal Address: The default address recognised by government and tax authorities. For companies, this is the registered company address. For individuals (i.e. sole traders), this may be your personal residence.
   • VAT Group Representative: If your VAT number is registered under a VAT group with a different address, use this address.
   • Tax Representative: The address of the financial or tax representative appointed to communicate with local tax authorities on your behalf.
   • Tax Authority: The official address of the tax authority in the country/region where your VAT registration is held, if the tax authority does not hold a separate address for you.
   • Service Provider: The address of a service provider responsible for managing your tax filings.
   • Other: If the address related to your VAT registration number does not fit into any of the above, select this option and provide additional supporting information.

If you have received a notice from Amazon to review the information you have provided for DAC7 verification, ensure that you follow the steps on their Legislation Compliance DAC7 portal.

If you received a separate notice informing you that you are required to apply for additional VAT registrations, you must complete the application as soon as possible.

Restoring selling privileges

If you have missed the deadline provided by Amazon for complying with DAC7, you may find your selling privileges temporarily suspended.  

This can be restored after uploading the correct information.  You can then login to Seller Central, navigate to Tax Settings, and provide the valid VAT registration information.

Amazon will then verify the information, which can take up to a week.

For assistance with the process, you can contact Amazon Seller Support for further information.   

What about the UK?

Although the UK is no longer part of the EU, several verification requirements are still in place. 

Sellers will still need to verify their basic information such as their VAT registration number, business name and address.

Some VAT registrations in the UK are issued with the tax authority’s (HMRC) own address – Amazon can use this for verification. 

Stay compliant with TBA Global

TBA Global is your one-stop-shop for compliance – we can help with VAT, EPR, product testing and certifications, EORI applications, trademarks and much more!

Get in touch with us at info@tbaglobal.com for a free one-to-one consultation.