An Amazon Report Bug causes incorrect VAT Returns in December 2019 and legal risks for sellers. On 09 January 2020, Amazon informed their third-party sellers that the VAT Transaction Report included incorrect or missing information.
Maximilian GamplLast Updated on
Contact your Accountant today and let them know how to avoid penalties and legal liability. This bug applies to all external service providers, including the internal Amazon VAT Service.
Amazon’s cryptic information was: “Due to a technical issue any report from December 2019… may be incomplete. Please request a new csv…”
As per Amazon, the bug is resolved (09.01.2019, 15:00 CET) and the new report can be requested again. This information was posted to Seller Central on the 9th of JAN, one day before the submission and payment (!) deadline in Germany.
What is the VAT Transaction report?
The VAT Transaction Report is the central source of data provided by Amazon to all VAT service providers to prepare your VAT Return. It includes sales, returns, refunds and other movement types. Most ERP, invoice and VAT software uses this report to calculate Sellers VAT liabilities.
The VAT Transaction Report includes most information required to file a VAT Return.
It can be requested via Sellercentral > Reports > FBA Reports > VAT Transaction Report—from the 3rd of the following month for the previous period.
Amazon responsible but not liable
It’s not the first time that Amazon, as the main provider of sales data is not caring much about the accuracy of data. As per Amazon Terms and Conditions, a seller has full responsibility for his VAT compliance. This also applies to users of the Amazon VAT and Amazon Invoicing Service.
How to fix the Amazon Report Bug
Take Action: Share this part of the Article with your VAT service provider to make them aware about this error. Clients using hellotax to file their VAT Returns received an Email with further instructions.
The error message was posted by Amazon on the 9th of JAN, one day prior to the German VAT Return deadline. Other country’s deadlines are close too.
Most VAT service providers prepared and submitted VAT Returns based on the original sales data. This may lead to extra work (best case) or penalties (worst case).
How to spot if your account is affected?
Most seller accounts are affected. To understand the impact of this error, just download the latest VAT Transaction report for December 2019 and compare it to the original report used by your VAT service provider to submit your return.
Visit the Seller Central > 1. Reports > 2. FBA Reports > VAT Transaction Report
Important: Comparing the VAT amount itself is not enough, as the error may be inside the EC Sales/EC Acquisitions (Goods movements between Warehouses), a hidden part that due to the Quick Fixes 2020 may lead to penalties by authorities.
Bug Fixing Guide
Once you download the latest VAT Transaction Report in the seller central, contact your VAT Service provider and make them aware of the need for a correction of your VAT Return.
Amendments have to be filed as soon as possible to avoid penalties. Each government has different rules on how to file an amendment. Contact us in case you need support.
Sellers using the Amazon VAT Service: Ensure to contact Seller Support (share this article)! The Error is not fixed automatically and amendments are not filed. Amazon’s departments work independently and most parts of the VAT service are outsourced to Avalara.
Consequences of not amending VAT Returns: In the case of missing transactions, this may lead to penalties once authorities spot this. We are unable to tell how likely this is. With the lately introduced VAT reforms in Europe, authorities are stricter with data mismatches.
We do recommend to correct your DEC 2019 VAT Return proactive. If your VAT service provider needs any help or does not provide support, feel free to reach out to us at firstname.lastname@example.org or via Facebook.
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Our VAT experts are happy to help you. Book a free consultation today!
Mistakes happen. To avoid unnecessary risks, sellers should think twice about having a properVAT compliance management in place. (hellotax free VAT software does automatically track and spot VAT mismatches.)
We’re curious, are you affected and how is your accountant dealing with it? Let us know your thoughts about this.