The Reverse Charge Mechanism was created by the E.U. to simplify trade within the single market. The Reverse Charge Mechanism moves the responsibility of reporting a VAT transaction from the seller to the buyer of goods or services. The condition is that both companies have to be VAT registered and the invoice should reflect that, read more about how to issue your invoice for B2B transactions here.

When a Reverse Charge happens, the buyer reports their purchase VAT(input VAT) and also the seller's VAT in their VAT return. These 2 statements offset each other from a cash payment point of view, but at the same time give authorities full visibility of the transactions.

How is the Reverse Charge Mechanism affecting reports why these invoices need to be reported?

Each transaction between two VAT registered businesses established in 2 different EU countries (including movements of own goods between warehouses located in different countries) is reported as a zero rated VAT transaction in the departure country (so reported by the seller with 0 VAT in VAT return and EC list report). The same transaction needs also to be reported in the delivery country (reported by the buyer with local VAT; both purchase VAT(input VAT) and selling VAT(output VAT) are reported). 

All these transactions between Amazon warehouses are being included in your reports, as they are not real sales we are including the net values of products you provided on your account. Read here more about product cost values and how to set it up in VATjar.

B2B cross-border transactions (called ECA - intra-community aquisitions and ECS- intra-community sale) have no impact on VAT payable amount.

It is, however, very important from the compliance point of view to report these transactions. Failure in reporting all ECA and ECS transaction might lead to penalties.
This is also why setting up your account properly is really important - including 
providing ALL products values (even if not active anymore) - if you do not provide the values we will report those goods with the value of 0.10 Euro.

Any B2B transaction (purchase, sale, goods movement between non-Amazon warehouses located in different countries) of your company which took part outside of Amazon marketplace needs to be reported to us in order to be included in your reports.

How is this affecting you? What do you have to do?

You must make sure your invoices are set up correctly. You can read more on how to set up invoices for B2B transactions here. If your invoices are not compliant, then your VAT returns can be directly affected.