Stopping Amazon's C.O.S Program: Everything You Need to Know
Amazon recently announced the cessation of its C.O.S (Call-Of Stock) program effective August 1, 2024, a crucial service for many sellers. Amazon’s C.O.S program allows sellers to store and sell in multiple European countries without having to register for VAT in those countries. The C.O.S program combines all the advantages of the Amazon FBA program without the hassle of managing taxes. In this article, we explore the impacts on sellers and possible alternatives. Discover the implications of the end of the Amazon C.O.S program and your VAT obligations from August 1.
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- Temps de lecture : 7 min
What is Amazon's C.O.S Program?
Amazon’s C.O.S (Call-Of Stock) program was a revolutionary logistics initiative for sellers looking to expand their presence in Europe.
The C.O.S program allowed sellers to store their products in Amazon’s European warehouses. This facilitated access to key European markets such as Germany, France, Italy, and Spain with a single VAT number, simplifying administrative and logistical management. This program combined all the benefits of the Fulfillment By Amazon (FBA) program, which are:
- Storing products in multiple European countries.
- Optimizing stock management.
- Reducing delivery times with Amazon Prime.
- Reducing VAT obligations.
How does Amazon's C.O.S program work?
Amazon relied on the VAT rules for consignment or call-off stock to simplify life for its sellers.
What is consignment or call-off stock?
Consignment stock is a storage strategy that involves storing your products in your client’s warehouses, which are taken when a sale is made. Under Amazon’s C.O.S program, it works as follows:
- You send your products to Amazon's logistics warehouses in Germany.
- Amazon sells your product to an individual customer in Germany.
- You sell your product to Amazon Germany.
Let’s see why this program offers a significant advantage to Amazon sellers.
Advantages of the C.O.S Program
The advantage of Amazon’s C.O.S program is that it greatly simplifies sellers’ tax obligations. Normally, Amazon sellers are required to register for VAT in the country of storage, collect VAT, and file VAT returns in that country. With consignment stock, you make an intracommunity B2B sale, which means:
- You send your products to Amazon's warehouse without registering for VAT.
- You sell to Amazon without VAT, and you don't need to file local VAT returns.
The tax and reporting obligations of the C.O.S program are:
- Issuing a proforma invoice in Amazon's name.
- Keeping a register of consignment products.
- Reporting the shipment of stock in the ERTVA under regime 20.
Once the product is sold by Amazon, you must:
- Issue a tax-exempt invoice to Amazon.
- Report your sale on your VAT return.
- Report your sale on the ERTVA return under regime 21.
What are the consequences of stopping the C.O.S program for Amazon sellers?
The end of Amazon’s C.O.S program involves managing new reporting and tax obligations for Amazon sellers.
VAT obligations with Amazon's FBA program
If you switch to the Amazon FBA program, you will need to register for VAT in all the countries where you store your products. The cost of a VAT registration is between €700 and €1000 per country.
VAT registration requires you to file VAT returns in all countries where you hold a VAT number.
What to declare on a local VAT return?
You must declare all so-called local sales, i.e., sales where your product is delivered in the same country as that of storage.
For example: My French company uses the Amazon FBA program and stores its products in Germany. In this case, my obligations are:
- Register for VAT in Germany.
- Collect German VAT on my sales to customers in Germany.
- Declare on the German VAT return all my sales where the products are shipped from German stock to customers located in Germany.
The end of the C.O.S program does not mean an increase in administrative and tax burdens. Entrust your tax obligations to our experts and focus on growing your business. Click here to book your free consultation with a specialized tax advisor and find out how to simplify your procedures today!
Business developer at Eurofiscalis, my goal is to simplify and popularize VAT rules for e-traders and companies exporting internationally. I know how complex and tedious it can be, and I am convinced that my experience and knowledge can help companies understand and comply with the current tax regulations.
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