From 2020 the E.U. introduced a new VAT reform that it is said to make the rules stricter for business to business goods movement (sale and transfers between warehouses of won goods).
One important part of the VAT matter that was impacted is cross-border transactions and the importance of VIES registration.
In order to make 0% VAT cross-border sales to other businesses, you and the other business involved in the transaction must be VAT registered and VIES compliant. By default, this would also include goods movement between warehouses in different EU states.
If VAT registration in VIES is not completed at the moment of shipment then you can be charged VAT (even if not selling, but just moving the goods).
The new rule also requires you to submit VAT returns always with matching EC lists - which need to present all VIES registered VATIDs of both parties involved in cross-border transactions (buyer-seller, your VATID in country A and your VATID in country B).
If you are still being registered in one or more countries and you activate the PAN-EU program, then basically, in order to submit matching VAT returns and EC lists, you should be paying VAT on all movements to “unregistered” countries (the VAT would be charged in the countries where you are already registered, as part of the VAT return).
At hellotax, we care about your compliance but we also understand that by using Amazon FBA there is no risk related to tax fraud in regards to goods movement arranged by Amazon.
To prevent your business from paying VAT on goods movements we are not submitting EC lists (if they are missing your VATIDs) until your registration in all countries is finished.
Once the registration is finished we are submitting the EC list matching with the previously submitted VAT return (unless your data was changed by Amazon, Manual Upload or system update).
It seems that for the moment tax authorities are not using their new right to question the VAT return submitted without an EC list. We hope that this will not change, but we would like to make sure that you are aware of the existing risk.
We strongly recommend registering for VAT before enrolling in the Amazon PAN-EU program, as you won't be able to control the Amazon storage locations and shipments.
When you begin registering for VAT, start with Spain, as in our experience it is the most difficult country to register for VAT in.
Even if it is late, our Accountants team has significant experience with such cases. We will help you minimize your costs and get fully compliant. We also will submit the goods movements reports 0% VAT value even if you are in the process of registration.