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Amazon Affiliate US earnings to EU country and VAT

by StoneTownFM
11 replies
Lets assume
  • I live in the EU
  • Earn commissions from Amazon Affiliate US
  • Have a company in the EU which is VAT registered
Now my question is: Do I have to pay VAT to my EU country's tax authorities on these affiliate commissions originating from the US?

If I have to, that's unbelievably dumb rule because, as you know, I can't send any kind of invoice (that would have VAT in it) to Amazon let alone the visitors of my site & Amazon who buy products through my affiliate links. Continuing that thought, in this case I'd have to pay the VAT out of my own pocket... which doesn't seem right at all.

I know that if the affiliate program was based in the EU I'd have to pay VAT, but how's the case with US companies (like the mentioned Amazon US)? I've read from some sources you wouldn't have to pay VAT in that case. But perhaps fellow warriors in the EU have some firsthand experience about this issue? Help would be greatly appreciated.
#affiliate #amazon #country #earnings #tax #vat
  • Profile picture of the author bymarcot
    Amazon commissions have nothing to do with VAT.

    Cheers
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    • Profile picture of the author StoneTownFM
      Originally Posted by bymarcot View Post

      Amazon commissions have nothing to do with VAT.

      Cheers
      Can you please elaborate?
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  • Profile picture of the author marketingva
    What I think Bymarcot is saying is that VAT only applies at the point of sale. You aren't involved in the selling process... you simply get paid for sending the referral who then goes through a transaction with Amazon. Not you.

    Bonnie
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    • Profile picture of the author StoneTownFM
      Originally Posted by marketingva View Post

      What I think Bymarcot is saying is that VAT only applies at the point of sale. You aren't involved in the selling process... you simply get paid for sending the referral who then goes through a transaction with Amazon. Not you.

      Bonnie
      Yeah that's how I understood it. But the problem here is that VAT must be generally paid on any income your business generates. But wouldn't it be extremely stupid to have to pay VAT on affiliate income for which you can't issue invoices? You just get money from overseas Amazon and can't control the taxation of their customers/your visitors.

      I've understood that if person resides in the EU and he signs up for affiliate program of an EU company, he must pay the VAT on this income. But I've also read from sources that income generated outside of EU (like the said Amazon US Affiliate earnings) is VAT exempt.

      So in essence, I'm asking if there is somebody who actually has experience with this stuff and has perhaps spoken to a knowledgeable accountant or tax man. From some forum threads it looks like US->EU affiliate earnings are VAT exempt but I don't have any hard data to back that up.
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      • Profile picture of the author SunilTanna
        I am not accountant or tax advisor, and laws may differ between countries, but it is my understanding that sales outside of the EEA are usually vat exempt.

        Sales to amazon.com would presumably fall in this category. Remember you are selling advertising/traffic to amazon. You are not actually selling books or whatever to end customers - you don't even know who the end customers are.

        Ask a qualified accountant or tax advisor for definitive information pertaining to your exact situation.

        Fwiw I believe traffic sold to an eu based affiliate program is not vat exempt. If you look in the affiliate agreements for large eu based affiliate programs, like eu amazon sites, you'll probably find terms pertaining to this.
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        • Profile picture of the author StoneTownFM
          Originally Posted by SunilTanna View Post

          I am not accountant or tax advisor, and laws may differ between countries, but it is my understanding that sales outside of the EEA are usually vat exempt.

          Sales to amazon.com would presumably fall in this category. Remember you are selling advertising/traffic to amazon. You are not actually selling books or whatever to end customers - you don't even know who the end customers are.

          Ask a qualified accountant or tax advisor for definitive information pertaining to your exact situation.

          Fwiw I believe traffic sold to an eu based affiliate program is not vat exempt. If you look in the affiliate agreements for large eu based affiliate programs, like eu amazon sites, you'll probably find terms pertaining to this.
          Thanks for your reply Sunil. I've also drawn that conclusion, and read comments elsewhere supporting this. But do you happen to have any firsthand experience on the subject? You are in the UK, do you do affiliate marketing with Amazon US?
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  • Profile picture of the author webmonopoly
    this is good to know
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  • Profile picture of the author PenTao
    Frankly, the best thing to do is contact Amazon support and ask them how they're handling VAT. We can all speculate on how it works, but you can bet their legal department is all over this.
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    • Profile picture of the author Alexa Smith
      Banned
      Originally Posted by PenTao View Post

      Frankly, the best thing to do is contact Amazon support and ask them how they're handling VAT.
      Unfortunately not. Far from it. The question discussed in this thread doesn't actually relate to how Amazon handles VAT. It relates to the VAT-liability of VAT-registered corporations in EU countries earning affiliate commission income from sales made outside the EEA.

      Originally Posted by PenTao View Post

      We can all speculate on how it works, but you can bet their legal department is all over this.
      Not at all. How this works isn't Amazon's concern in any way.

      Which is why one needs to seek answers to such questions from a qualified accountant in one's own jurisdiction.


      .
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  • Profile picture of the author Summer1
    Originally Posted by StoneTownFM View Post

    Lets assume
    • I live in the EU
    • Earn commissions from Amazon Affiliate US
    • Have a company in the EU which is VAT registered
    Now my question is: Do I have to pay VAT to my EU country's tax authorities on these affiliate commissions originating from the US?

    If I have to, that's unbelievably dumb rule because, as you know, I can't send any kind of invoice (that would have VAT in it) to Amazon let alone the visitors of my site & Amazon who buy products through my affiliate links. Continuing that thought, in this case I'd have to pay the VAT out of my own pocket... which doesn't seem right at all.

    I know that if the affiliate program was based in the EU I'd have to pay VAT, but how's the case with US companies (like the mentioned Amazon US)? I've read from some sources you wouldn't have to pay VAT in that case. But perhaps fellow warriors in the EU have some firsthand experience about this issue? Help would be greatly appreciated.
    I am in Germany, and no idea what VAT is, but I have to pay the "income tax" because I received that incomes in my bank account, and everything is received in your bank account as income is taxable. It doesn't matter from any sources, anything you own in bank account.

    I consulted this with my "Steuerberater" some kind of accountant, and I had to pay income tax for anything more than €470/month (or €450 not sure exactly) - this will be counted in yearly total amount, so about €5640 a year. If you earn that amount or less a year, you still need to report your income but you don't have to pay taxes. But reporting is a must, but please consult with your accountant to be safe.

    Hope this helps.
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