New Amazon Call-Off Stock Logistics System (COS)

There is no doubt that Amazon's backbone is its logistics structure and its "Fullfilment by Amazon" (FBA) system allows sellers operating in Seller Central to send their inventory to logistics centers, so that Amazon is in charge of storing, packing and shipping in record time, as well as handling customer service and returns at very competitive shipping rates and warehousing costs. ‍

* Check what are the Amazon's logistics rates.

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Amazon's FBA logistics is not only available to reach buyers in the national territory. This structure is also cross-border and makes it easier for sellers to expand their business and access users in large European markets where the platform is present, such as Italy, France or Germany, and thus multiply their sales.

Until now, the vendor has had two programs for this purpose:

• ‍EFN Program "European FulfillmentNetwork" . : Consists of international shipments from the same inventory stored in Amazon's logistics centers in Spain or from the local market. ‍
• Pan-European Program (PanEU) : By activating this program, the seller authorizes Amazon to distribute and store its inventory in logistics centers in each of the European markets where it has the product for sale.

Among the benefits of the latter logistics modality, sellers not only have Prime-branded products throughout Europe and faster and more agile deliveries for their European buyers, but they also benefit from significant savings in logistics costs, since shipments outside the local market are no longer international and, consequently, national rates are applied in these markets.

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Let's take an example:

Let's suppose a Seller resident in Spain that sells through Amazon in all European markets and has two products in its catalog, a jar of face cream and a jar of body cream. He places an order for both products from Amazon Italy. The shipping rates for each product depending on the logistics program used will be as follows:

At this point, you may be wondering: Why is it that with Amazon' s Pan-European Program having such advantages, many sellers still opt for the FBA International or EFN System? The answer is simple and will probably also make you rethink your choice: the VAT tax obligations that arise from storing stock in the different European countries where an Amazon logistics center is used.

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‍Fiscal Obligationsof Amazon's Pan-European Program:

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‍1. Have a local VAT ID number, or the same, register the company for VAT purposes, in each of the European countries where inventory is stored.

VAT registration in EU countries usually takes approximately eight to twelve weeks.   

‍2. To file VAT returns in each of these countries.

Each member country has its own requirements and filing periods in which VAT returns must be filed. Communication with the Tax Agencies is generally in the local language. 

 3. Report remote sales through the One Stop Shop (OSS) system in your country of residence.‍ 4.

All these tax formalities can be costly both in time and money, as well as giving us some headaches, and as you would expect from Amazon, it has not taken long to find a solution through the launch of a new sub-program within the PanEU to encourage its use:

                                                 Stockpile Reserve Program (COS)

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With this new Amazon Call-Off Stock (COS) system, the seller can stock inventory in the countries participating in the Pan-European Program of their choice, without needing to have a VAT registration number in each of those countries.

This program works thanks to the simplification of VAT at the EU level, provided that certain requirements are met, the most important of which are as follows:

1. The "intended buyer" who will eventually purchase the inventory held in the Reserve Stock Program must be known.

Amazon will be the "intended buyer" of the products, which it then resells to customers immediately. In other words, the way this program works is that Amazon, through its company Amazon EU S.à.r.l., becomes the buyer of the products that are subscribed.

In this way the products will appear on the detail pages of the foreign marketplaces as "Sold and shipped by Amazon" and, consequently, the sales for the seller will be B2B and treated as intra-community business-to-business transactions.

‍2. Declaration requirements must be complied with, including the submission of EC sales lists to the tax authority of the country from which the products will be shipped.

Amazon provides transaction records on cross-border sales and inventory transshipment between Amazon warehouses.

Reports > Amazon Logistics > Taxes > Amazon VAT Transaction Report

With this report it is easy to identify the Reserve Stock Program sales and inventory movement between the country from which your inventories were shipped and the country of storage activated by the COS program.

3. Any unsold inventory stocked through the Reserve Stock Program must be returned to the original country of shipment within 12 months.‍

Amazon will take the necessary steps to return products that have not been sold within this period.

This new program allows you to enjoy the advantages and benefits of the Pan-European Program without facing its fiscal complications, making it a way to increase your sales, bringing the products in your catalog closer to customers all over Europe in a more profitable and simple way.

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