An email from Amazon notifying you of account restrictions or deactivation can mean an interruption to your sales and, in some cases, the withholding of part or all of your available balance in reserve.
Amazon may require you to provide or verify tax information, such as a valid VAT number, details regarding inventory storage locations, or documents proving your business tax status.
The obligation to register for VAT arises from the national legislation of individual countries, rather than directly from Amazon's policies. However, if a seller fails to meet Amazon's requirements regarding tax information or its verification, account features may be restricted or selling privileges deactivated.
The issue must be addressed systematically and strictly in accordance with the specific requirements stated in Amazon's notification.
Why might Amazon restrict sales due to VAT?
The cause always depends on your business model and how your logistics are set up. The most common situations include:
- Storing goods abroad (FBA): If your inventory is stored in another EU Member State, you may incur VAT registration, reporting, and payment obligations in that country. Under the Pan-European FBA programme, Amazon may distribute inventory across fulfilment centres in the countries you have enabled for storage. Sellers must therefore assess their VAT obligations in advance for all countries where their stock may be held.
- Missing or unverified VAT number: Amazon may also require a valid VAT number in other countries if your sales or inventory storage trigger a tax obligation there.
- Discrepancies in company details: Amazon may verify the validity of submitted VAT numbers, check the consistency of information in Seller Central, and request supporting documents if necessary. If your company name, address, VAT number, or other details do not match the submitted documents or relevant official registers, you may need to correct the information or provide proof of its accuracy.
- Cross-border B2C sales and OSS: For certain cross-border distance sales of goods to end consumers in the EU, an EU-wide threshold of EUR 10,000 per calendar year may apply. However, this threshold only applies if statutory conditions are met—among other things, it is for businesses established in only one EU Member State, provided they did not exceed the threshold in the preceding calendar year either. Once exceeded, VAT generally applies in the customer's country. While the One Stop Shop (OSS) scheme can simplify the reporting of these sales, it does not replace local VAT registration in a country where the seller stores inventory.
- Identification and tax information requirements (including DAC7): As an online platform operator, Amazon complies with reporting obligations in the EU under the DAC7 Directive. Consequently, it may require sellers to provide identification, banking, and tax details or related documents. While DAC7 itself is not a VAT regime, failing to provide the requested information may complicate your use of the platform or the completion of account verification.
How to check where the problem lies in Seller Central
Do not panic; find out the exact reason for the action taken.
- Log in to Seller Central and check the notifications on your homepage, in the Account Health section, and under Performance Notifications. Look for messages regarding VAT, tax information, or tax compliance.
- Under Settings > Account Info > Tax Information, verify your submitted VAT numbers, the current status of any verification requests, and any requirements for additional documentation.
- Check which countries Amazon has actually stored or is currently storing your inventory in. Focus particularly on your Pan-European FBA settings, cross-border inventory movement programmes, and your FBA inventory movement history, comparing them against the countries where you hold a valid VAT registration.
- Follow the exact wording of the notification. Amazon may simply require you to add a specific VAT number, or it may ask for further documentation or an explanation.
First steps after account restriction: What to watch out for
- Do not open a new account: Creating a new account in an attempt to bypass restrictions may violate Amazon's multiple account policy. If the system flags the new account as improperly linked, it may also be restricted. Always address the restricted account primarily through the procedures outlined in Seller Central.
- Submit only genuine documents: Never submit altered, counterfeit, or misleading documents. Only provide Amazon with genuine, complete, and up-to-date documents that reflect the actual situation. Using doctored records can lead to rejection and further account restrictions.
How to draft a Plan of Action if Amazon requires one
In cases where Amazon explicitly requires an explanation or a "Plan of Action" to reactivate your account, it is advisable to follow a clear structure based on tangible steps:
- Root Cause: Be specific. For example: "When using FBA, we incorrectly assessed our local VAT registration obligations in the country where our inventory was stored."
- Immediate Actions: Describe what you have already done. State that you have conducted a review of your tax obligations, initiated the VAT registration process (which you can substantiate with proof of application submission), and updated the missing information in Seller Central.
- Preventative Measures: Explain how you will prevent the issue from recurring. You might mention regular monitoring of FBA storage locations, implementing checks on cross-border transactions, utilising the OSS scheme where relevant, or working with tax specialists.
How Taxeedo can help you
If your account restriction is due to VAT issues or missing tax information, accurate tax documentation is a vital part of the solution. Both the decision to reactivate the account and the processing speed depend on Amazon's internal procedures and foreign tax authorities.
Taxeedo can assist you with the tax aspects of the entire process:
- VAT obligation analysis: We will assess in which countries your inventory movements and sales have triggered an obligation to register, file returns, or remit VAT.
- Handling VAT registrations: We will represent you in communications with foreign tax authorities and assist with your VAT registration abroad.
- Review of tax information: We will check your Seller Central settings to ensure they match your actual circumstances and meet all requirements.
- Review of documentation for Amazon: If Amazon requires a Plan of Action from you, we can help review the tax-related sections to ensure they accurately reflect your situation and include specific corrective steps.
Final summary
- An Amazon account restriction due to VAT or incomplete tax information should not be resolved through guesswork or by opening a new account.
- First, verify the exact request in Seller Central, check the countries where your inventory is stored, and compare them against your current VAT registrations.
- If you are unsure about the scope of your obligations or need to register for VAT abroad, contact Taxeedo.
We will help you assess your situation and prepare the necessary tax documentation for your next steps.
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