50 cents per package is the penalty fee for FBA merchants who do not allow Amazon to store their goods in Poland and the Czech Republic as well.
On 08/04/2021, Amazon informed all marketplace merchants that the current per-unit shipping surcharge will be lowered from 50 cents to 35 cents effective 08/06/2021. More about the effects in the following text.
The more packages the greater the savings, but...
Until now, Amazon sellers based in Germany and participating in the "Central Europe" program (i.e. merchants using the FBA warehouses in Poland and the Czech Republic) had quite a weighty advantage in terms of shipping fees.
This is because they were able to save the shipping surcharge of 50 cents per unit compared to retailers who ship exclusively from logistics centres in Germany. Amazon thus provides financial incentives for retailers who agree to store their products in Poland and the Czech Republic.
By lowering the shipping advantage from 50 cents to 35 cents as of 08.06.2021, participation in the "Central Europe" program will be somewhat less rewarding than before, even though it should still be fundamentally attractive to a great many Amazon Sellers. This change also affects the calculation that every Amazon Seller should perform who intends to activate the "Central Europe" program.
The calculation for this Central Eastern Europe Programme (CEE) of Amazon is only simple at first glance.
A retailer with 1,000 packages per month currently saves 6,000 euros per year, or from 08.06.2021 then only 4,200 in FBA fees - a large retailer with 50,000 packages per month currently saves 300,000 and from 08.06.2021 then still 210,000 euros per year.
There is only one major hurdle: the Value Added Tax.
In the following, we explain what has to be taken into account in terms of VAT and how these challenges are solved.
This already begins with the transfer of goods to Poland and the Czech Republic.
The stock transfer of goods to Poland and the Czech Republic is a taxable transaction
Whenever goods are moved permanently, e.g. for a planned sale, to another EU country, the following happens for VAT purposes
In order for the state to which the goods are being transferred to know about it, you must declare a so-called intra-Community transfer there. This transfer is a tax-free delivery in Germany.
When the goods arrive in Poland or the Czech Republic, a so-called intra-Community acquisition occurs.
i.e. shipments/ig. Acquisitions: The use of cross-border fulfillment structures continuously leads to taxable transactions.
This acquisition must be declared in the recipient country (Poland or Czech Republic).
Now both states (e.g. Germany and Poland) know that you have taken goods there.
Below you can see how to declare shipments and acquisitions.
In the country where the transfer starts - here in Germany - you declare the tax-free intra-Community supply (transfer). You enter the cumulative purchase prices or production costs of all goods transferred in a month or quarter as the tax base in field 41.
In the country where the transfer ends - here in Poland - you declare the taxable intra-Community acquisition and claim the deduction, so that the balance is in principle zero. The basis of assessment is again the purchase prices or production costs, which in the case of Poland you would still have to convert into zloty, which we have not done in this example for didactic reasons.
Where will the sales be taxed afterwards?
Sales from Poland and Czech Republic to Germany and other countries
A large proportion of the goods is in many cases sold again to Germany and other EU countries.
Where and at what rate are these sales taxable?
If you sell B2B across borders or to a third country (e.g. Switzerland), the answer is simple: you always declare everything tax-free where the delivery to the customer begins, i.e. in Poland or the Czech Republic.
Fulfillment centers in Poland and the Czech Republic: Deliveries to end consumers (B2C) are taxed in the country of destination if the delivery threshold is exceeded or a waiver is declared.
For sales to final consumers in the EU, the answer depends on the delivery threshold of the EU country where the buyer is located.
If you are a trader based in Germany, you should generally always avoid the German delivery threshold. In this case you can immediately tax all deliveries to Germany with the German VAT rate in Germany.
Otherwise, you would have to pay tax on the deliveries at 23 per cent more Polish and 21 per cent more CzechValue Added Tax . (Note: Even with reduced tax rates, it is often worth waiving the delivery threshold for Germany, as the reduced tax rate in Germany is also lower than in Poland and the Czech Republic).
You can read more about delivery threshold and delivery threshold waiver here read up.
However, you must be aware of one special feature.
The waiver of the German delivery threshold must be formally requested in Poland (form VAT 21). The waiver takes effect 30 days after the application has been received by the Polish tax office. A retroactive waiver is therefore not possible.
For deliveries to other EU countries (e.g. France) it also depends on the level of the respective delivery threshold of the country of destination where these are taxable. A waiver is not always advisable here, as you would otherwise be liable to tax directly in that state.
Delivery thresholds: If the delivery threshold is exceeded for sales to final consumers, taxation always takes place in the country of destination.
How can you or your tax advisor meet the above tax obligations in Poland and the Czech Republic?
With Taxdoo you can automatically fulfil all sales tax obligations for Poland and the Czech Republic.
Taxdoo can automatically fulfil all sales tax obligations in Poland and the Czech Republic. In addition to the above-mentioned Value Added Taxadvance returns, there are other forms which must be submitted in Poland, for example: Summary declaration (ZM) and Standard Audit File - Tax (SAF-T).
Our system will provide you with all submitted declarations as well as a monthly payment request for the settlement of the VAT debt in Poland and the Czech Republic.
What does this solution cost?
For example, with 1,000 sales per month, the monthly cost is 247 euros.
For example, if you have 10,000 sales per month, the cost is 307 euros per month.
You no longer have to monitor any deadlines and have only one contact person. Taxdoo is therefore the first fully automated one-stop shop for Amazon CEE or Pan EU.
You need pro-forma invoices that document your movements to the warehouses in Poland and the Czech Republic for the tax authorities? No problem: Generate Taxdoo automatically!
What do I do if I had activated storage in Poland and the Czech Republic some time ago but have not yet filed tax returns there?
Retrospectively automated cleaning up in Poland and the Czech Republic for several years
Taxdoo can also offer this service automatically for several years retroactively.
Our system also automatically determines since when and why you are liable for tax in the respective state.
Simply click here or on the button below and book a live demo in which we personally explain the advantages of our automated Value Added Taxcompliance to you and/or your tax advisor via screen transmission.
If required, we also offer this service for even more EU countries, e.g. within the framework of the Amazon Pan EU programme. Each additional country can then be added to the above mentioned prices for 79 Euro per month.