BREXIT Implications for Amazon Businesses After the 1st of January 2021

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Get Brexit – Ready!

As of 31 January 2020, the UK is officially out of the EU, nonetheless, there is a transition period until changes actually occur. After 31 December 2020, this transition period ended the UK is treated as a third-country for the EU, where the rules and regulation which now govern the traffic of goods and services will no longer apply.

A trade agreement has been reached regarding only domestic products that comply with the rules of origin. Read more about this by clicking here.


What does Brexit mean for Amazon’s sellers?


The UK leaving the EU’s Single Market and Custom Union as soon as 2021 starts, will impact Amazon’s sellers so information and anticipation are key to minimize its effects.


Recently Amazon has released a communication which explains what measures they will be taking and advising sellers how they should handle their online stores.



For FBA (Fulfilment by Amazon) users


Because of Brexit, Amazon will change the way they operate across the new UK-EU custom border.

If you are using FBA or Fulfilment by Amazon, you should be aware of the following changes and their dates.



Inventory removal orders for cross-border inventory will stop i.e. removing inventory from UK fulfillment centers to EU addresses and from EU fulfillment centers to UK addresses.


Any removal orders created before this date will continue to be processed until December 31, 2020. Local removal requests will continue to be accepted as usual (i.e. within the UK or within the EU region).


In Need of BREXIT Advice?


Pan-European FBA inventory transfers will stop between the UK and EU.


From this point, sellers will need to send inventory to fulfillment centers in the UK and the EU to maintain your stock levels. Pan-European FBA inventory already placed in the EU before Friday December 18 will continue to be used to fulfill EU orders and Pan-European FBA inventory in the UK will continue to fulfil UK orders. Pan-European FBA inventory transfers will continue as usual within the EU region.


Cross-Border Fulfilment via EFN (European Fulfillment Network) and Pan-European FBA will start winding down, stopping in full on Monday, December 28.


To maintain the European sales, Amazon sellers will need to send products to fulfillment centers in the UK and the EU.


End of the transition period between the UK and EU.


Unless an agreement is reached, from January 1, 2021 there will be a customs border between the UK and EU.


Sellers sending goods from outside Europe (like China or the US) into an Amazon Fulfilment Center are expected to experience minimal disruption, since these goods already cross customs border and these processes are not expected to change in the UK nor the EU.

For MFN (Merchant Fulfilled Network) users


Seller-fulfilled orders (where Seller is using a 3rd party carrier) can continue to be fulfilled across the UK-EU border. It will be the Seller’s responsibility to ensure all duties and tariffs are paid prior to delivery to the customer.
If selling from UK or EU, to fulfill orders across the UK-EU border, sellers should consider splitting their inventory and sending it to a fulfillment center in the UK and the EU, so that there is sufficient stock either side of the new customs border.


It is highly advisable to speak to carriers to determine how they will manage the movement of goods across the UK-EU border from January 1, 2021.



Get ready for Brexit


If you are selling through Amazon between the EU and the UK then Brexit comes as a new challenge to deal with. New regulations and requirements will be enforced and you must ready your business to minimize the impact.


In this regards and according to Amazon guidelines, sellers should plan head and move or split their inventory by sending it to a fulfilment centre in the UK and the EU, so that there is sufficient stock either side of the new customs border. This may require you to ship your products across the new UK-EU customs border, which may have VAT implications.


VAT Registration


A VAT number will be require in the country where the goods are stored. GVC can asses your situation to determined whether a VAT registration is needed. Contact us to get your assessment as soon as possible to avoid future complications.


EORI number


In addition to VAT registrations, if your business involves import or export of physical goods into the EU or UK, there is a possibility that you may require a new EORI number as of 1 January 2021. This will ensure you can continue your operations avoiding costs and delays when clearing customs. You can apply for your EORI number here.


Fiscal Representation


Fiscal Representation will be another issue to deal with before Brexit, as certain countries require non-EU businesses to appoint a VAT representative to be able to be VAT registered. In addition, only specific companies who comply with exhaustive requirements and are approved by local tax authorities can be appointed as Fiscal Representatives. Global VAT Compliance Fiscal Representation services comply with all these requirements and can act as your Fiscal Representative in all your required countries.


VAT reporting


When UK leaves the EU single market in January 2021 VAT reporting will suffer changes as well. Depending on your businesses, some reportings will no longer apply and new ones will arise. A thorough assessment of your situation will be crucial for the correct application of import and export rules which will have a direct impact not only on VAT and customs requirements and returns but on the physical move of goods as well. GVC make sure you are VAT compliance Post-Brexit, do not hesitate to contact us for more information.


Other non-VAT related considerations


Licenses and certifications


You should also confirm if you need licenses, certificates or permissions from intellectual-property rights owners to move your goods across the border.

Providing custom clearance documents


You will need to decide how you want to make customs declarations and whether you will hire a person or business to deal with customs for you.

Global VAT Compliance can help you with all of your VAT obligations regarding BREXIT. Please contact us and very soon one of our VAT experts will get in touch with you to assess your VAT compliance requirements.



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