The issue of VAT refund may come up when non-EU companies import goods to the EU and sell them via Marketplace. It arises because of two things: first, the marketplace collects and remits all VAT collected from buyers; and second, the company as an importer pays VAT at customs.

The process of returning VAT can be long and tedious, sometimes lasting 4 and a half years. In Italy, this process can take up to 45 months.

An Indian company in Germany imported goods from India and paid customs clearance charges. By December, the company sold goods via Amazon, but may not claim their VAT until the end of the year. The negative GST might have been due to a VAT return submitted by them at the beginning of December, which collected the charge.

If there is a lack of working capital, it will lead to a shortage.

Today, I am going to share 3 ways you can skip the hassle of dealing with VAT refunds.

Non-EU sellers can get VAT refunded

With France’s import VAT law, all imported goods require no bureaucracy or deposit to be able to postpone VAT payment. Each company importing goods to France may report and pay import VAT in a monthly return using a deferred VAT scheme. At the same VAT return company can credit the same amount. The result is zero payable tax, which is beneficial for marketplace sellers. Croatia, Belgium, Ireland, Poland, and some other EU countries also allow the deferred VAT accounting scheme for import of goods. An importer may consider one of such countries to avoid long and difficult refunds of import VAT.

The tax relief options available to non-EU sellers

If a company is located within the European Union, it might not have to pay any VAT on products sold through Amazon because Amazon is exempted from having to pay VAT. The seller receives the collected VAT and reports it within their yearly Tax Return like usual.

What you need to know about the VAT refund

Read online briefs that focus on customs issues related to the Customs Union.

Custom Procedure 42 is for international goods being brought into an EU country that will then be transported to another country. In this case, the VAT is due in the latter – the country of destination. Now, an importer can use Custom Procedure 42 to obtain a VAT exemption and avoid paying VAT twice.

We understand the importance of working capital. We will refund VAT paid at customs and advise in cases.

If you’re looking for a streamlined solution to manage VAT refunds and optimize your marketplace operations, consider leveraging our API for online marketplace. Our API offers efficient VAT refund processes and expert guidance to ensure you can overcome the challenges associated with VAT refunds and maintain a healthy working capital. Learn more about our API for online marketplace to simplify your VAT refund process.