Amazon Sellers Accounting for Estonian Businesses

There are three common reasons for this difference: first, settlements include transactions from the previous reporting period that were still in processing — the settlement covers approximately 14 days of transactions but the bank transfer may include a balance carried from the prior period. Second, Amazon sometimes holds a reserve (account level reserve) that is deducted from the disbursement — this reserve appears in the settlement report as a balance held rather than transferred. Third, if you have multiple marketplaces (DE, FR, PL), each generates its own settlement with its own transfer, and bank receipts from different marketplaces may arrive on different days. Always reconcile from the settlement report to the bank, marketplace by marketplace, rather than comparing totals.

Act immediately — this is a serious compliance issue. From the date your first units entered each non-Estonian FBA warehouse, you have had a VAT obligation in that country. The first step is to establish exactly which countries hold your inventory (Seller Central → Reports → Fulfillment → European Fulfillment Network → Inventory) and identify the earliest date stock arrived in each country. The second step is to register for VAT in each country — this can be done through Amazon’s VAT Services or through a local tax adviser in each country. The third step is to file late returns with the appropriate amounts, which will include back-assessed VAT plus late payment interest. The sooner you regularise the position, the lower the penalties. Do not continue selling from those warehouses without registering.

Amazon Sponsored Products, Sponsored Brands, and DSP advertising spend appears as charges in your Seller Central account and is deducted from your settlement balance. For accounting purposes, advertising is an operating expense — specifically a sales and marketing cost (not COGS). The advertising charges appear in the settlement report under ‘other transaction types’. Post them to an ‘Advertising — Amazon’ operating expense account. If you want to measure advertising efficiency, track Advertising Cost of Sale (ACoS) as a KPI: ad spend ÷ ad-attributed revenue. This is separate from your financial accounting but essential for understanding your channel economics.

Amazon’s DAC7 figure includes VAT (in VAT-inclusive markets) and is gross of all fees — so it will always appear higher than your declared net revenue. This is expected and not itself a problem. What you need to do: prepare a reconciliation document showing (1) Amazon gross figure from DAC7, (2) deduct VAT collected in each market at the applicable rates, (3) deduct returns and refunds, (4) the resulting net = your declared revenue. If the net still does not match, there may be income you have not declared — the most common causes are: foreign marketplace income (Amazon US, UK) not included in your Estonian accounts, or a timing difference where some December settlements arrived in January and were excluded. Fix any genuine discrepancy in your accounts before EMTA contacts you.

US Amazon sales are revenue of the Estonian OÜ and must be included in the company’s accounts and annual report. Each USD settlement is converted to EUR at the transaction-date rate. For US sales, EU VAT does not apply — the supply is outside EU VAT scope. However, US sales tax (collected and remitted by Amazon under the marketplace facilitator laws in most US states) means Amazon handles US sales tax for most transactions — you do not need to register for US sales tax unless you have physical presence (nexus) in a US state. For Estonian income tax purposes, USD revenues converted to EUR are included in the OÜ’s total revenue. If you are considering distributing dividends, the retained profit includes USD-sourced income converted to EUR — the 20% dividend tax applies to the full EUR-equivalent amount.