If you have the Amazon VAT Calculation Services turned on in your Amazon Seller Central Account there should be a number of transaction types showing in Tax under the Mappings page.

Please Note: If this feature is enabled the separated tax lines are 100% VAT and the associated sales, shipping, and gift wrap lines are net amounts excluding VAT. These must be coded appropriately to your accounting system depending on whether you are lodging VAT returns internally or externally from your accounting system.

OPTION 1. VAT returns from QuickBooks/Xero

When you have VAT calculation service enabled and are completing your VAT returns from QuickBooks, you will need to "wrap" the amounts that fall under the Tax category back into the income accounts (so as to gross the income back up to be VAT inclusive) and then apply the applicable tax rate in the mapping.

Example:

In the ‘Sales' category, you apply the 20% (or applicable) VAT Rate to Order ItemPrice Principal.

In the 'Tax' category, you would need to mirror this. So, the Order ItemPrice Tax line for sales would need to be mapped to that same sales account with the same tax rate applied. So you would apply 20% (or applicable) VAT Rate to Order ItemPrice Tax.

When this is sent to your QuickBooks/Xero the Net amount plus the VAT amount hits the account and the accounting system can strip out the correct VAT amount. In the example above the VAT rate of 20% will be stripped out which should match the VAT Amazon has calculated.

Then, you would need to repeat this 'mirroring' process for all the rest of the lines that you see are separated out in the Tax category of your Mappings page.

UK VAT Registered

The below mappings is VAT mappings you wish to use if you are VAT registered in the United Kingdom.

Please Note: Sales Invoices in QuickBooks do not work with the reverse charge codes. Please use journal entries instead.

Transaction Category

VAT Rate

QuickBooks Tax Code

Xero Tax Code

Adjustments

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Advertising

VAT 20%

20% S (Sales)

20% VAT on Expenses

Commissions and Selling Fees

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Delivery and Transport

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Fulfillment and Warehousing

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Gift Wrap

VAT 20%

20% S (Sales)

20% VAT on Income

Lending

NO VAT

NOTAXS (0%)

NO VAT

Other (Item Price)

VAT 20%

20% S (Sales)

20% VAT on Income

Other (Item Fees)

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Pending Balance

NO VAT

NOTAXS (0%)

NO VAT

Promotions (Item Price)

VAT 20%

20% S (Sales)

20% VAT on Income

Promotions (Item Fees)

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Refunds

VAT 20%

20% S (Sales)

20% VAT on Income

Reimbursements

NO VAT

NOTAXS (0%)

NO VAT

Reserved Balance

NO VAT

NOTAXS (0%)

NO VAT

Sales

VAT 20%

20% S (Sales)

20% VAT on Income

Shipping Expense

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Shipping Income

VAT 20%

20% S (Sales)

20% VAT on Income

Subscription and Service Fees

Reverse Charge 20%

20% RC SG (Purchases)

Reverse Charge Expenses 20%

Tax (Shipping, Sales, Refunds)

VAT 20%

20% S (Sales)

20% VAT on Income

Once you have completed the mappings, you must Reprocess each of the applicable settlements before sending the settlement to your accounting system.


OPTION 2. VAT Returns Outside of QuickBooks/Xero

If Amazon VAT Calculation service is enabled and the VAT is lodged externally from your accounting system the solution is simple.

taxomate will pick up the tax lines separately and they can all be mapped to the 'Amazon Sales Tax Collected' Liability account with a No Tax or Tax Exempt rate applied.

When you run a balance sheet report the amount sitting in this liability account is the amount that should be remitted to your tax authority for the time period.

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