Starting February 1, 2024, Amazon will introduce changes to the referral fee calculation for Marketplace Facilitator transactions, which are often referred to as Deemed Reseller or VAT on E-commerce transactions. This update primarily affects cross-border sales, where items purchased by a customer are shipped to a different country than the originating Amazon store.
Previously, Amazon calculated the final price by applying the VAT rate of the destination country, resulting in varying referral fee amounts for cross-border shipments. With the new update, the referral fee amount will be consistent, regardless of the destination country. For instance, a listing on Amazon.de with a price of €119 will attract a referral fee of €11.90, irrespective of whether the product is shipped to Germany, Portugal, or Luxembourg, despite the different VAT rates in these countries.
However, transactions where sellers directly sell to Amazon or those that involve promotions, such as lightning deals, will not be subject to these changes. The specifics of these exclusions and further examples can be found in the 2023 Amazon referral fee changes documentation.
To accommodate this change, the Amazon Services Europe Business Solutions Agreement will be updated. Sellers need to acknowledge these modifications by continuing their selling services post-February 1, 2024.
Original Amazon’s announcement:
Effective February 1, 2024, we will update the referral fee calculation for Marketplace Facilitator transactions, also known as Deemed Reseller or VAT on Ecommerce transactions.
For more information, go to UK and EU VAT on E-commerce legislation.
The change will apply to cross-border sales, when items purchased by a customer are shipped to a different country than the Amazon store. For example, when a customer makes a purchase on Amazon.de and selects a shipping address outside of Germany. There will be no change to the referral fee calculation when items are shipped to the country where the Amazon store is located.
This update will simplify the referral fee calculation logic for sellers as the fee amount will be the same irrespective of the destination country.
How will this update change the referral fee amount charged?
For Marketplace Facilitator transactions, Amazon currently calculates the final price by applying the VAT rate of the country the product is being shipped to, which leads to a different Referral fee amount when the product is shipped cross-border. With this update, the fee amount will remain the same irrespective of the destination country.
Example 1: You create a listing on Amazon.de and provide a price of €119. Customer purchases the item and selects a shipping address in Germany, where the VAT rate is 19%. Customer will pay €119 (100+19 VAT). Assuming a fee rate is 10%, you are currently paying a €11.90 referral fee and will continue to pay €11.90 starting February 1, 2024 (no change).
Example 2: You create a listing on Amazon.de and provide a price of €119. Customer purchases the item and selects a shipping address in Portugal, where the VAT rate is 23%. Customer will pay €123 (100+23 VAT). Assuming a fee rate is 10%, you are currently paying a €12.30 referral fee but starting February 1, 2024 you will pay €11.90.
Example 3: You create a listing on Amazon.de and provide a price of €119. Customer purchases the item and selects a shipping address in Luxembourg, where the VAT rate is 16%. Customer will pay €116 (100+16 VAT). Assuming a fee rate is 10%, you are currently paying a €11.60 referral fee but starting February 1, 2024, you will pay €11.90.
Note: Transactions where you sell directly to Amazon or which include a promotion such as lightning deal, are excluded from the scope of these changes. For detailed information on the list of transactions that are excluded from the scope of this change and for more examples, go to 2023 Amazon referral fee changes.
We will update the Amazon Services Europe Business Solutions Agreement, to reflect this change. Your continued use of selling services after February 1, 2024, constitutes your acceptance of this change. To read the agreement, go to Amazon Services Europe Business Solutions Agreement.
The Amazon Services Europe team
