Many Amazon sellers advertising on European marketplaces have experienced frustration with high click costs, unpredictable conversion rates, and what appears to be an unavoidable advertising VAT expense. However, there's important news: under specific circumstances, this "advertising VAT" can actually be refunded.
Policy Analysis: Understanding Amazon's Advertising VAT
Amazon announced in 2018 that European marketplace sellers would need to pay VAT on advertising services. The announcement contained two key points:
- Key Point 1: Amazon transferred all sponsored advertising services and agreements to its EU-based advertising entity.
- Key Point 2: This EU entity would charge VAT on sponsored advertising fees to sellers with VAT registrations in relevant countries.
Amazon also clarified the VAT charging conditions:
- Condition 1: When a seller's VAT address differs from their business location country, the VAT rate is 0%.
- Condition 2: When the VAT address matches the business location country, the applicable national VAT rate applies.
Most Chinese sellers fall under the first condition. Therefore, only those who registered their VAT address in China but incorrectly listed an EU address in their Amazon backend might have been erroneously charged advertising VAT, making them eligible for refunds.
Refund Process: Step-by-Step Guide
Step 1: Verify Your VAT Address
Log into your Amazon Seller Central account and navigate to [Settings] → [Tax Settings] → [VAT Registration]. Carefully check whether your actual registration address is in China while the backend mistakenly shows an EU country.
Step 2: Confirm VAT Charges
Check whether Amazon has actually deducted advertising VAT through either:
- Method 1: Review documents in [Reports] → [Tax Document Library] titled "Product Ads VAT Invoice"
- Method 2: Check [Advertising Campaign Manager] → [Manage] → [Billing & Payments] for payment invoices
Step 3: Submit Refund Request
Open a case via [Help] → [Get Support] → [Selling on Amazon] → [Other Issues]. Clearly state:
- Your VAT registration number
- That your VAT address is in China and you were incorrectly charged
- Your willingness to cooperate with any investigation
- Your request for refund of these charges
Step 4: Follow Up
Wait for Amazon's response. If processing takes too long, politely follow up while maintaining professional communication.
Step 5: Receive Refund
Successful applications will receive confirmation from Amazon's tax team along with refund details.
Important Notes
This refund opportunity doesn't apply to Digital Services Taxes (DST) on advertising management fees, which remain non-refundable. Also, refund applications may be denied if Amazon determines no erroneous charges occurred.
Eligible sellers are encouraged to act promptly, as refunds may cover multiple years of incorrectly charged VAT, potentially representing significant financial recovery.