Faster delivery to customers, lower fulfilment fees, and automatic distribution of stock to warehouses across Europe. The Pan-European FBA (Pan-EU) and Central Europe Programme (CEE) are among the most effective tools for scaling sales on Amazon.
There is a major catch, however: when you click the "Activate" button in Seller Central, Amazon does not strongly warn you about the multitude of tax obligations you might instantly trigger.
In this article, we will clearly explain how these logistics programmes work, why the Czech OSS system is insufficient for them, and how to correctly report the transfer of your own goods between European warehouses.
1. The fundamental difference: FBM vs. FBA from a VAT perspective
Before we delve into the specifics of individual programmes, it is necessary to clarify the fundamental tax difference in Amazon logistics:
- FBM (Fulfilment by Merchant): You hold the goods in your own warehouse in the Czech Republic. As soon as a customer, for example from Germany or France, orders a product, you send it directly from the Czech Republic. In such cases, registration for the OSS (One Stop Shop) scheme in the Czech Republic is usually sufficient.
- FBA (Fulfilment by Amazon): You dispatch goods to Amazon logistics centres abroad. If Amazon stores your goods in another EU Member State, you generally have an obligation in that country to arrange local VAT registration and related reporting. The OSS scheme itself does not generally replace this obligation.
Also read the related article on the difference between Dropshipping and Fulfilment.
2. What exactly do the CEE Programme and Pan-EU do?
Once you switch to FBA, Amazon may offer you enrolment in two key logistics programmes:
Central Europe Programme (CEE)
The CEE programme is primarily designed for sellers using the German market. You grant Amazon permission to store your inventory and transport it between warehouses in Germany, Poland, and the Czech Republic.
- Tax impact: If your inventory is stored in Germany, Poland, and the Czech Republic as part of the programme, you must usually arrange local VAT registration and related reporting in each of these countries. In practice, therefore, you need valid and verified VAT IDs for Germany, Poland, and the Czech Republic.
Pan-European FBA (Pan-EU)
Under the Pan-EU programme, you allow Amazon to distribute your goods among its fulfilment centres in various European countries – typically, for example, Germany, Poland, the Czech Republic, France, Italy, or Spain, and potentially other EU countries.
- Tax impact: The need arises to arrange local VAT registration and regular reporting in all affected countries where Amazon physically stores your goods. The number of registrations required depends on the countries in which Amazon actually stores your inventory and which countries you have activated for Pan-EU.
3. FC Transfers: How to report the transfer of your own assets
The biggest accounting challenge with the CEE and Pan-EU programmes is presented by so-called FC Transfers (Fulfilment Centre Transfers). These are situations where Amazon, without your direct instruction, moves, for example, 50 units of your goods from a warehouse in Poland to a warehouse in Germany to be closer to customers.
From a legal and VAT perspective, this is not mere internal logistics:
- Intra-Community Supply (ICS): From the perspective of Polish VAT, the movement of goods from a warehouse in Poland is reported as the transfer of one's own assets to another EU Member State.
- Intra-Community Acquisition (ICA): The receipt of the same goods at a warehouse in Germany is simultaneously reported in the German VAT return as the acquisition of goods from another EU Member State.
The specific method of reporting and any obligations relating to the EC Sales List (recapitulative statement) are governed by the rules of the respective Member States.
These movements can be traced in Amazon reporting, which contains data on inventory transfers between fulfilment centres. For tax purposes, it is important to correctly link information on inventory movement with VAT reporting and accounting.
If you do not have these transfers correctly accounted for and reflected in the relevant statements, you expose yourself to the risk of penalties for incorrectly reporting the cross-border movement of your own assets.
4. Overview of logistics regimes on Amazon
| Regime / Programme | Where the goods are located | Where you typically arrange VAT registration |
|---|---|---|
| FBM | Only in the CZ (own warehouse) | CZ; for cross-border B2C sales to the EU, OSS can be used if conditions are met |
| FBA Single-Country | Only in 1 foreign country (e.g. Germany) | CZ + the country where the goods are stored (e.g. Germany) |
| CEE Programme | Germany, Poland, CZ | Usually local registration in the countries where the goods are stored – typically DE, PL, and CZ |
| Pan-European FBA | In the countries included in your Pan-EU settings | Local registration in countries where Amazon physically stores your inventory |
Important: Specific tax obligations may vary depending on account settings, transaction types, country of origin of the goods, and other circumstances. Enrolment in OSS itself does not replace obligations associated with storing your own goods in another EU Member State.
5. How to prevent inventory problems on Amazon's side?
For sellers using CEE or Pan-EU, Amazon checks whether they have uploaded and verified VAT IDs for the relevant countries in their Seller Central settings.
If the system detects that your goods are located in a Polish warehouse, for example, but you do not have the required and verified Polish VAT ID:
- Amazon may restrict or block your ability to sell from that warehouse.
- The goods may remain unsellable until you provide the required confirmation of VAT registration.
- In extreme cases, it may be necessary to remove the inventory from the given country or request its disposal, which can mean additional costs.
The correct procedure before launching CEE / Pan-EU
- Prepare in advance: Obtain local VAT IDs in the relevant countries before you turn on the programmes in Seller Central. Processing a registration in Germany or Poland can take several weeks to months.
- Upload to Seller Central: Once you receive confirmation from the foreign tax authority, upload the VAT ID to Amazon and wait for its verification.
- Only then activate CEE/Pan-EU: This will reduce the risk of problems when transferring goods and potential sales restrictions.
6. Checklist: What to verify before activating CEE or Pan-EU?
Before you click "Activate" in Seller Central, go through the following points:
- ☐ Do I know in which countries Amazon can store my goods?
- ☐ Do I have valid and verified VAT IDs in these countries?
- ☐ Have I sorted out local VAT returns and other related reporting?
- ☐ Do I know how I will record and report FC Transfers between individual countries?
- ☐ Have I set up regular processing of Amazon VAT reports?
- ☐ Have I verified that my VAT IDs are correctly linked to Seller Central?
- ☐ Do I have a process for checking inventory transfers between fulfilment centres?
- ☐ Do I know who will handle potential changes in the number of countries where Amazon stores my goods?
If you do not know the answer to any of these questions, it is better to sort out your tax setup before activating CEE or Pan-EU.
Keep cross-border VAT on Amazon under control
Joining the CEE or Pan-EU programmes is a great step for the growth of your e-shop, but the associated tax administration can cause significant complications for an inexperienced seller.
Are you preparing to activate CEE or Pan-EU, or are you already selling through Amazon's warehouses?
At Taxeedo, we handle VAT registrations in Germany, Poland, France, and other EU countries, process complicated Amazon VAT reports, and take care of complete EC Sales Lists and local VAT returns.