Amazon and Tax
Have a client who invoices Amazon for linking his site to theirs; they basically pay him a commission for this service. He has enquired into the VAT position and I advised he has to account for VAT but reclaim it at the same time i.e. the Reverse Charge scheme. However he has sent me a link today which states;
"Amazon does not pay VAT on your referral fees. If you are an EU resident taxable person established outside Luxembourg you are not required to charge VAT to Amazon EU Sarl. Instead Amazon EU Sarl accounts for the VAT due on this supply under the reverse charge mechanism. This is because, under European VAT legislation, the marketing services provided by EU associates established outside Luxembourg are subject to VAT in the country where the recipient of the service is established (refer article 44 of the VAT Directive 2006/112/EC).
Even though the services are not subject to VAT in your own country European VAT legislation generally requires you to issue a VAT invoice for services provided to other companies established in the EU. You would not charge VAT on this invoice but you would need to mention Amazon EU Sarl Luxembourg VAT number on the invoice (LU20260743), include the reason why you do not charge VAT and ensure you meet all the other requirements of a VAT invoice as applicable in your country. If in doubt you should verify the requirements with your local tax office or with your tax adviser. Amazon EU Sarl invoice address is listed below:
Therefore does the reverse charge not apply here; does the client simply not charge VAT?
Bit confused, maybe I'm not reading it right, any clarification would be helpful.
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