Amazon Sellers Accounting for Estonian Businesses

A complete accounting guide for Amazon FBA sellers — Seller Central reconciliation, FBA fee structure, multi-country P&L allocation, VAT obligations per warehouse country, DAC7 reporting, and the monthly close process.

FBA Fees Seller Central EU VAT Multi-Country DAC7 A2X Commingled Inventory Reimbursements
14d Settlement Cycle
15+ FBA Fee Types
7 EU FBA Countries
DAC7 2024 Reporting
OSS VAT Mechanism
Gross Revenue Method

5 Key Takeaways From This Page

Amazon settlements are not revenue — they are summaries
Amazon’s bi-weekly settlement report shows one net number after deducting referral fees, FBA fees, refunds, and promotional credits. Each of those components must be posted separately in your accounts — the net settlement alone is useless for bookkeeping.
FBA warehouses in EU countries require local VAT registrations
Every EU country where Amazon stores your inventory creates a domestic VAT obligation that OSS cannot cover. Germany, France, Poland, Czech Republic, Spain, Italy — each requires its own VAT registration and monthly/quarterly filing.
DAC7 means Amazon reports your sales data to EMTA automatically
From 2023, Amazon is legally required to report total sales volume, fees collected, and payment details for every EU seller to the relevant tax authority. Your declared income must match. Discrepancies trigger automatic inquiries.
Commingled inventory creates COGS allocation complexity
Amazon’s commingled inventory mixes identical ASINs from different sellers. When a commingled unit sells, you cannot determine whose specific inventory was sold. COGS must be calculated at average cost across all units of that ASIN.
Multi-country FBA requires separate P&L per country
An Estonian seller using PAN-EU FBA has revenue, FBA fees, storage costs, and VAT obligations in up to 7 EU countries simultaneously. A single P&L misrepresents the business. Country-level reporting is essential.

What accounting does an Estonian Amazon FBA seller need? Monthly Seller Central settlement reconciliation (gross sales → all fee types → refunds → promotions → net payout), COGS recognition at product level, FBA fee categorisation into COGS and operating expenses, multi-country inventory tracking, EU VAT compliance (local registrations for each FBA warehouse country, OSS for cross-border sales), DAC7 reporting alignment, and a monthly P&L by marketplace. This page covers each of these workstreams in full.

Section 1 — How Amazon FBA Works Financially

The money flow from customer order to seller payout — and every fee that sits in between

The Amazon FBA Money Flow

When a customer buys your product on Amazon, the money does not flow directly to you. Amazon captures the payment, deducts all applicable fees and charges, and transfers the net amount to your bank account in a bi-weekly settlement cycle. The difference between what the customer paid and what you receive can be 30–50% of the sales price — depending on your product category, size, weight, and fulfilment method.

1
Customer Pays
Customer pays Amazon for your product. Amazon holds the funds.
2
Amazon Fulfils
FBA picks, packs, ships, and handles returns. Fulfilment fees charged.
3
Fees Deducted
Referral fee, FBA fee, storage fee, and other charges deducted.
4
Balance Accrues
Net amount accumulates in your Seller Central account balance over 14 days.
5
Settlement Transfer
Every 14 days, Amazon transfers the available balance to your bank account.

FBA vs FBM — Accounting Differences

Aspect FBA (Fulfilled by Amazon) FBM (Fulfilled by Merchant)
Fulfilment cost FBA fee charged by Amazon per unit (COGS) Your own shipping cost (COGS)
Storage cost Monthly storage fee charged by Amazon (OpEx or COGS) Your warehouse rent (OpEx)
Inventory location Amazon EU warehouse(s) — creates local VAT obligations Your own location — simpler VAT
Settlement Bi-weekly; net of all FBA fees Bi-weekly; net of referral fee only
Return handling Amazon handles; refund issued; COGS complex You handle; COGS and inventory restored directly
Accounting complexity High — many fee types; multi-country inventory Lower — closer to standard e-commerce

Section 2 — FBA Fee Structure

Every fee type, where it appears in your accounts, and how to categorise each one

The Complete Amazon FBA Fee Taxonomy

Amazon charges over 15 distinct fee types to FBA sellers. Each has a different accounting treatment: some belong in COGS (directly tied to delivering a specific unit to a customer), others belong in operating expenses (period costs not tied to specific transactions). Getting this categorisation wrong distorts your gross margin.

Amazon FBA Fee Classification

Fee Type Description Accounting Treatment COGS or OpEx?
FULFILMENT FEES (per-order, per-unit)
Referral fee % of sales price per item; varies by category (7–20%) Direct cost of selling on Amazon COGS — per unit
FBA fulfilment fee Picking, packing, shipping per unit; based on size/weight Direct fulfilment cost per unit COGS — per unit
Returns processing fee Charged when customer returns FBA item; varies COGS or expense depending on volume COGS — per return event
STORAGE FEES (monthly)
Monthly storage fee Per cubic metre of inventory stored; higher in Oct–Dec Period inventory carrying cost OpEx — period cost
Long-term storage fee Additional fee for inventory stored 365+ days Penalty cost for slow-moving stock OpEx — write-down trigger
Aged inventory surcharge Graduated surcharge for 181–365 day old inventory Period cost signal to liquidate OpEx — period cost
ACCOUNT AND SELLING FEES
Professional selling plan €39/month subscription fee Platform subscription OpEx — period cost
High-volume listing fee Per ASIN fee above listing threshold Listing management cost OpEx
PROGRAMME FEES
FBA Subscribe & Save fee Enrolled S&S products: Amazon charges management fee Programme-specific cost OpEx or contra-revenue
Vine programme fee Per ASIN review programme; flat fee Marketing cost OpEx — marketing
Brand registry fee Annual trademark registration via Amazon Varies OpEx — admin
FINANCE AND RESERVE
Disbursement transfer No fee for standard transfers; fees for express Banking cost if applicable OpEx — bank charges
Account level reserve Portion of balance held by Amazon (not a fee but affects cash) Balance sheet — receivable Asset — not P&L

Section 3 — Seller Central Settlement Reconciliation

How to read the settlement report, reconcile to your bank, and post correct journal entries

Understanding the Settlement Report

Amazon’s Seller Central generates a settlement report every 14 days. The report shows gross sales, each fee category deducted, refunds, promotional credits, and the net transfer amount. For accounting, you must break this net amount back into its components — recording gross revenue and each fee type separately, not just the settlement net.

The settlement report is available in multiple formats in Seller Central (Payments → Transaction View, and Payments → All Statements). For accounting purposes, the flat-file transaction report (downloadable as TSV or CSV) provides the most granular detail and is the input to A2X or your manual import process.

Amazon EU Settlement — Period: 1–14 November 2026 (Germany Marketplace)

Item Amount (€) Running Total (€)
GROSS SALES
Product sales (gross, incl. German VAT) €18,640.00 €18,640.00
Shipping charged to customers €0.00 €18,640.00
Gift wrap charged €0.00 €18,640.00
RETURNS AND REFUNDS
Customer refunds (product) −€892.00 €17,748.00
Return shipping refunded €0.00 €17,748.00
AMAZON FEES
Referral fees (avg 15%) −€2,796.00 €14,952.00
FBA fulfilment fees −€2,243.00 €12,709.00
FBA monthly storage fees −€312.00 €12,397.00
Professional selling subscription −€39.00 €12,358.00
Aged inventory surcharge −€48.00 €12,310.00
PROMOTIONAL COSTS
Lightning deal fees −€150.00 €12,160.00
Coupon redemption fees −€84.00 €12,076.00
ADJUSTMENTS AND REIMBURSEMENTS
FBA reimbursement (lost inventory) +€182.00 €12,258.00
Previous period balance carried forward +€420.00 €12,678.00
Net transfer to bank (14 November) €12,678.00 €12,678.00

Settlement Journal EntryJE-1: Amazon Settlement Posting (November 1–14)

Account Debit (DR) Credit (CR)
Cash — Amazon Reserve (gross revenue) €18,640.00
Revenue — Amazon DE (net of VAT) €15,278.69
VAT Payable — German Umsatzsteuer €2,968.91
Deferred Revenue (returns provision) €392.40
COGS — Amazon Referral Fees €2,796.00
COGS — FBA Fulfilment Fees €2,243.00
COGS — Amazon Return Processing €147.00
OpEx — FBA Storage (monthly) €360.00
OpEx — Selling Plan Subscription €39.00
OpEx — Promotions (Lightning Deals) €234.00
Other Income — FBA Reimbursements €182.00
Cash — Amazon Reserve €5,819.00
Cash — Bank (settlement received) €12,678.00
Cash — Amazon Reserve €12,678.00

German VAT (19%) extracted from gross sales using the tax-inclusive formula: €18,640 ÷ 1.19 × 0.19 = €2,969. This goes to German VAT return (Umsatzsteuer) — not Estonian KMD.

Section 4 — EU FBA: Multi-Country VAT Obligations

Every country where Amazon stores your stock requires its own VAT registration — here is the full picture

The Pan-European FBA Programme — What It Creates

Amazon’s Pan-European FBA (PAN-EU) allows Amazon to redistribute your inventory across its fulfilment network in 7 EU countries to minimise delivery times. This is commercially beneficial — but it creates a VAT registration obligation in each country where stock is physically held. From the moment your first unit enters a French fulfilment centre, you have a French VAT obligation.

You cannot use OSS to cover domestic sales from these warehouses. OSS only covers cross-border sales. A French FBA sale to a French consumer is a domestic transaction — OSS does not apply. You need a French VAT registration and a French VAT return for these sales.

Country Amazon FBA Sites Local VAT Registration Required? VAT Rate Filing Frequency
🇩🇪 Germany Frankfurt, Leipzig, Koblenz, and others Yes — Umsatzsteuer (DE VAT) 19% standard Monthly Voranmeldung + annual
🇫🇷 France Paris region, Lyon, Brétigny, and others Yes — TVA 20% standard Monthly CA3 + annual
🇵🇱 Poland Wrocław, Łódź, Szczecin, and others Yes — VAT (PL) 23% standard Monthly JPK_V7M + annual
🇨🇿 Czechia Prague region Yes — DPH 21% standard Monthly or quarterly DAP DPH + annual
🇪🇸 Spain Madrid region, Zaragoza Yes — IVA 21% standard Monthly Modelo 303 + annual
🇮🇹 Italy Milan region, Castel San Giovanni Yes — IVA 22% standard Monthly LIPE + annual
🇸🇪 Sweden Stockholm region Yes — Moms 25% standard Monthly + annual

Cross-Border vs Domestic FBA Sales — VAT Treatment

Stock Location Customer Location VAT Treatment Filed Where
Germany FBA Germany Local German sale — German 19% VAT German Umsatzsteuer return
Germany FBA France Cross-border — French 20% via OSS OSS return (Estonia)
Germany FBA Poland Cross-border — Polish 23% via OSS OSS return (Estonia)
France FBA France Local French sale — French 20% VAT French TVA return
France FBA Germany Cross-border — German 19% via OSS OSS return (Estonia)
Estonia Germany Cross-border — German 19% via OSS OSS return (Estonia)
Estonia Estonia Domestic — Estonian 24% VAT Estonian KMD


PAN-EU FBA creates VAT obligations from the first unit stored — not from a sales threshold

Unlike the €10,000 OSS threshold for distance sales, the obligation to register for local VAT in an EU country arises the moment Amazon stores your first unit there. There is no threshold, no grace period, and no revenue minimum. If you opt into PAN-EU FBA and your inventory lands in a Polish fulfilment centre on day one, you have a Polish VAT registration obligation from day one. Many sellers discover this months or years after enrolling in PAN-EU — and face back-assessed VAT with interest and penalties. Register for each country’s VAT before enrolling in PAN-EU FBA.

Section 5 — Multi-Country P&L for FBA Sellers

How to build a country-level profitability view that separates Amazon EU from the overall business

Why a Single P&L Is Misleading for Multi-Country FBA

A single combined P&L for a PAN-EU FBA seller mixes revenues and costs from multiple countries, obscures country-level profitability, and makes it impossible to determine whether your German marketplace is covering its costs or whether your Polish FBA inventory is turning fast enough to justify the storage fees. Country-level P&Ls are essential for management decisions — and required for accurate multi-country VAT returns.

Monthly P&L by Amazon Marketplace — November 2026

Line Item 🇩🇪 Germany 🇫🇷 France 🇵🇱 Poland Total EU FBA
REVENUE
Gross sales (excl. VAT) €15,279 €8,432 €4,180 €27,891
Returns and refunds −€733 −€312 −€95 −€1,140
Net Revenue €14,546 €8,120 €4,085 €26,751
COGS
Product cost (FIFO at landed cost) −€5,820 −€3,249 −€1,634 −€10,703
Amazon referral fees (15%) −€2,182 −€1,218 −€613 −€4,013
FBA fulfilment fees −€1,746 −€974 −€490 −€3,210
Inbound shipping to FBA −€620 −€342 −€171 −€1,133
Gross Profit €4,178 €2,337 €1,177 €7,692
Gross Margin % 28.7% 28.8% 28.8% 28.8%
OPERATING EXPENSES
FBA storage fees −€312 −€174 −€87 −€573
Aged inventory surcharge −€48 −€0 −€24 −€72
Professional selling plan (pro-rated 3-way split) −€13 −€13 −€13 −€39
Promotions (Lightning Deals, coupons) −€234 −€0 −€0 −€234
Local VAT compliance cost (accountant) −€85 −€85 −€85 −€255
Operating Profit €3,486 €2,065 €968 €6,519
Operating Margin % 24.0% 25.4% 23.7% 24.4%

The product cost ‘landed cost’ method

For FBA sellers importing goods from outside the EU, the product cost should be the landed cost — the total cost of getting one unit to the Amazon fulfilment centre. This includes the ex-works price from the supplier, international freight (proportional per unit), import duties, and inbound shipping to FBA. Using only the supplier invoice price understates COGS and overstates gross margin. For goods imported from China or other non-EU sources, landed cost is typically 20–40% higher than the ex-works price.

Section 6 — DAC7: Amazon Reports Your Sales to Tax Authorities

What DAC7 is, what Amazon reports, and why your declared income must match

What DAC7 Is

DAC7 (Directive on Administrative Cooperation, 7th amendment) is an EU directive that requires digital platforms — including Amazon, Etsy, eBay, and Airbnb — to collect information about sellers’ transactions on their platform and report it annually to the tax authority in the seller’s country of residence. For Estonian Amazon sellers, Amazon reports to EMTA. EMTA then shares the data with other EU member states where the seller may have tax obligations.

DAC7 has been in force from January 2023, with the first reports covering the 2023 tax year submitted by platforms in January 2024. Amazon began collecting DAC7 data from January 2023 and has been reporting annually since then.

What Amazon Reports to EMTA (per seller, per year) Notes
Total revenue from sales on Amazon EU marketplaces Gross sales across all EU Amazon platforms
Total fees charged to the seller Referral fees, FBA fees, subscription, and all other charges
Number of transactions Total order count for the year
Bank account details registered on Seller Central IBAN or bank routing information
Identification details Name, address, date of birth (individuals) or company registration details (entities)
Tax identification number Estonian OÜ registration number or personal ID for FIEs
Which EU member states the seller is registered in Based on Seller Central registration data

Why DAC7 Creates a Compliance Imperative
Before DAC7, it was theoretically possible (though illegal) to underreport Amazon income because tax authorities had limited visibility into marketplace sales. From 2023, EMTA receives Amazon’s annual seller report before the tax year-end. When you file your OÜ annual report or FIE income tax return, EMTA can cross-reference your declared income against Amazon’s reported figures. A significant discrepancy triggers an automatic inquiry.

DAC7 data matching — what EMTA can see
EMTA’s DAC7 data from Amazon shows gross sales (including VAT in VAT-inclusive markets), total fees, and transaction count. Your declared revenue in your annual financial statements and KMD returns is net of VAT. EMTA needs to gross-up your declared net revenue to compare it with Amazon’s gross figure. Any gap — including unexplained returns, promotional credits not properly accounted for, or foreign marketplace income not declared — will be visible in the comparison. Ensure your accounting produces a reconcilable trail from Amazon’s reported gross to your declared net.

DAC7 Reconciliation — Making Your Accounts DAC7-Proof

DAC7 Reconciliation — Full-Year Amazon EU Revenue (Estonian Seller)What Amazon reports to EMTA (DAC7 annual report):

Gross sales (all EU marketplaces, incl. all local VAT): €284,000

Total fees charged: −€72,000

Net to seller: €212,000

What your OÜ accounts show:

Revenue — Amazon DE (net of 19% VAT): €94,118

Revenue — Amazon FR (net of 20% VAT): €72,000

Revenue — Amazon PL (net of 23% VAT): €30,894

Revenue — Amazon IT (net of 22% VAT): €18,033

Other EU marketplaces (net of local VAT): €15,400

Total net revenue from Amazon EU: €230,445

Reconciliation to DAC7 gross figure:

Net revenue (your accounts): €230,445

Add back: VAT in all local markets (various rates): +€53,555

Gross revenue (DAC7 comparable): €284,000

Matches Amazon’s DAC7 report: ✅ €284,000

Keep this reconciliation on file. If EMTA queries: show the calculation. Differences arise from returns timing, FX conversion, platform credits.

Section 7 — Commingled Inventory: The Accounting Challenge

What commingling is, why it complicates COGS, and how to manage it

What Commingled Inventory Is

Amazon’s Commingled Inventory (also called Stickerless Inventory or Commingling) allows Amazon to mix units of the same ASIN from different sellers into a single pool. When a customer orders your product, Amazon may fulfil it from another seller’s stock if that stock is physically closer to the customer — and vice versa. In exchange, the other seller’s units can be used to fulfil your customers’ orders.

Commingling reduces storage costs and improves delivery speed. The accounting challenge is that you can no longer track which specific units you purchased were sold. Your COGS must be calculated at average cost across all units of that ASIN, not at the specific cost of units you sent in.

Stickerless vs stickered inventory
Commingling only applies to Stickerless Inventory (where no seller-specific FNSKU barcode is applied). If you use stickered inventory (each unit has your FNSKU barcode), your units are tracked separately and commingling does not occur. Stickerless inventory is cheaper to prep but introduces commingling. Stickered inventory requires labelling costs but maintains clean inventory tracking. For accounting purposes, stickered inventory is significantly cleaner — choose it unless the labelling cost is prohibitive.

COGS Calculation for Commingled Inventory

For commingled ASINs, use weighted average cost across all units of that ASIN in your FBA inventory at the time of sale. Since you cannot identify which specific units were sold, the average is the correct approach under both IFRS (IAS 2) and Estonian GAAP.

Commingled Inventory COGS — Weighted AverageASIN: B0EXAMPLE1 — Stainless Steel Water Bottle 500ml

Inventory position:
Batch 1 (May shipment): 200 units @ €4.20 landed cost
Batch 2 (Aug shipment): 300 units @ €4.80 landed cost
Total in FBA: 500 units

Weighted average cost:
(200 × €4.20) + (300 × €4.80) = €840 + €1,440 = €2,280
€2,280 ÷ 500 units = €4.56 per unit

November sales: 180 units
COGS for November: 180 × €4.56 = €820.80
Closing inventory: 320 units × €4.56 = €1,459.20

* When Batch 3 arrives at a different cost: recalculate weighted average
* Track per-ASIN average cost in a spreadsheet; update with each shipment
* For stickered inventory: use FIFO instead; more accurate but more admin

Section 8 — FBA Reimbursements

When Amazon owes you money — inventory lost, damaged, or miscounted — and how to account for it

Types of FBA Reimbursements

Amazon is liable to reimburse sellers for inventory that is lost, damaged, or miscounted while in Amazon’s fulfilment network. These reimbursements appear in the settlement report and represent Amazon compensating you for inventory you can no longer sell. For accounting purposes, a reimbursement is income — but it has a corresponding COGS adjustment because the original inventory was already expensed.

Reimbursement Type When It Occurs Accounting Treatment
Lost inventory Amazon cannot locate units that should be in their system Reverse the COGS write-off (DR Amazon Receivable; CR COGS) when claim initiated; recognise as Other Income when reimbursed
Damaged inventory Units damaged in Amazon’s warehouse or during fulfilment Similar to lost inventory — reverse COGS write-off; Other Income on reimbursement receipt
Customer return not received Customer received refund but Amazon did not return unit to seller Other Income when reimbursed; triggers investigation if large volume
Overcharged fees Amazon charged incorrect referral or FBA fee Reduce the relevant fee expense when credited; does not affect COGS
Carrier-damaged inbound Inventory damaged during inbound shipping to FBA Claim against carrier first; if Amazon reimburses, Other Income

Tracking and Claiming Reimbursements

Amazon does not automatically reimburse every discrepancy — many must be actively claimed through Seller Central’s Case Log or via third-party reimbursement tools (Refund Genie, GETIDA, etc.). Unclaimed reimbursements represent money Amazon owes you that will expire after 18 months. A systematic monthly reimbursement audit is good accounting practice.

1
Download Inventory Report
Monthly: Seller Central → Reports → Fulfillment → Inventory → Inventory Reconciliation
2
Identify Discrepancies
Compare expected inventory (units sent minus units sold) to Amazon’s reported inventory count
3
Open Cases
For each discrepancy > €20, open a case in Seller Central → Help → Contact Us → FBA Issue
4
Track Pending Reimbursements
Log open cases: ASIN, quantity, estimated value, case date. Chase after 10 business days.
5
Post When Received
When reimbursement appears in settlement: DR Cash Amazon / CR Other Income (reimbursement)

Section 9 — Integrating Amazon with Accounting Software

A2X, manual import, and the monthly close process for Amazon FBA sellers

A2X — The Standard for Amazon Accounting Integration

A2X is the most widely used integration tool for Amazon accounting. It pulls settlement data directly from Seller Central via API, breaks each settlement into its component categories (sales, fees, refunds, promotions, reimbursements), applies your pre-configured account mapping, and posts a summarised journal entry to Xero or QuickBooks. For a PAN-EU FBA seller with multiple marketplace settlements, A2X manages each marketplace separately and consolidates into a single monthly entry.

Feature A2X Capability Without A2X
Settlement ingestion Automatic via API — pulls all settlements Manual export and import per settlement per marketplace
Multi-marketplace Handles DE, FR, PL, IT, ES simultaneously Each marketplace requires a separate manual process
Fee categorisation Auto-maps each Amazon fee type to your chart of accounts Manual mapping per settlement entry
VAT extraction Extracts VAT from gross prices per marketplace Manual extraction — high error risk
Xero/QuickBooks posting Automatic journal entry posted monthly Manual journal entry creation
Reimbursement handling Identifies and posts separately Buried in net settlement — often missed
Monthly time required 30–60 minutes review 8–15 hours manual reconciliation
Cost From €29/month (up to 200 orders) Accountant time at professional rates

Monthly Amazon Close Checklist

Task When Source Data Sign-Off When
Download all settlement reports Day 1 Seller Central → Payments → All Statements All marketplaces downloaded; no gaps in period
A2X sync (or manual import) Day 1–2 A2X dashboard or manual CSV All settlements imported; account mapping verified
Post settlement journal entries Day 2 A2X output or manual categorisation Revenue, fees, VAT, reimbursements all posted
Inventory reconciliation Day 2–3 FBA Inventory Reconciliation report Units sold × average cost = COGS; closing inventory correct
Reimbursement audit Day 3 Inventory discrepancy report Open cases for all discrepancies greater than €20
FX revaluation (if USD settlements) Day 3 Month-end rates All USD/GBP balances restated to EUR
Country-level P&L review Day 4 Accounting system Each marketplace P&L reviewed; gross margin validated
VAT data compilation Day 4 Settlement data by country Domestic sales per country prepared for local VAT returns
German VAT Voranmeldung By 10th–26th (depending on reporting period) German ELSTER portal German domestic sales filed and paid
Other country VAT returns Per country filing calendar Accounting data by country Each country filed per local deadline
OSS return (quarterly) 30 days after quarter end Cross-border sales from FBA locations All intra-EU FBA cross-border sales declared

Frequently Asked Questions

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.

Selling on Amazon from Estonia? Get your accounts right.

Book a free 30-minute consultation. We reconcile your Seller Central reports, set up your EU FBA VAT registrations, configure A2X, and produce a monthly P&L that actually reflects your Amazon business.

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