Amazon handles tax collection in the US, the EU, and the UK, but with conditions. For the US, it does so automatically through marketplace facilitator laws, included in standard seller fees. For the EU and UK, it requires enrolling in the VAT Calculation Service (VCS), available within the Professional selling plan.
For sellers who need to go further, several gaps remain. Amazon does not generate fully compliant invoices in every market, does not cover e-invoicing mandates, does not alert you when you approach a registration threshold in any jurisdiction, and only files tax returns in the US.
This guide covers how to configure taxes in Amazon Seller Central step by step, which compliance obligations the platform cannot handle, and where a tax plugin closes those gaps.
How to configure taxes in Amazon
The basic tax configuration in Amazon Seller Central takes five steps. Together they make the platform apply the correct taxes on each sale. What they do not cover, we address in the next section.
1. Access the tax settings
Go to Seller Central > Settings > Tax. From here you control the tax configuration for your account across every marketplace where you sell. Amazon organises the configuration by region: each market has its own rate rules and exemptions.
2. Activate the VAT Calculation Service for the EU and UK
For Amazon to apply the correct VAT rate on sales to EU and UK customers, enrol in the VAT Calculation Service (VCS) from Seller Central > Tax > VAT Calculation Service. With VCS active, Amazon calculates and applies the VAT rate of the buyer's country on each transaction.
For the US, Amazon applies sales tax automatically through marketplace facilitator laws, with no additional setup required.
3. Enter your tax registration numbers
For each country where you are registered, add your tax identification number under Settings > Account Info > Tax Information. This number is required for Amazon to apply the correct tax regime and for it to appear on transaction documents.
4. Configure product exemptions
Amazon lets you define reduced rates or exemptions for specific product categories. If you sell products that carry a reduced or zero rate in any of your markets, configure these overrides in each product's listing under Manage Inventory > Edit product > Tax.
5. Review your invoicing documents
In Seller Central > Reports > Tax Document Library you can access Amazon's transaction documents. With VCS active, Amazon generates VAT documents for EU and UK sales. These documents do not meet the requirements for a fully compliant tax invoice in most markets, and they are not compatible with e-invoicing mandates.
With these five steps, Amazon applies the correct taxes within the territories it covers. What it does not do is resolve the compliance obligations that go beyond rate application.
Amazon tax limitations for international sellers
The five configuration steps cover the basics: applying the rate on each order within the covered territories. Real tax compliance goes further. None of these points have a native solution in Amazon.
No e-invoicing compliance
Many tax authorities now require invoices to be transmitted to a government portal in a structured digital format before they are legally valid. Amazon has no mechanism for this. The markets where it already applies include:
- EU: France, Germany, Italy, Spain, and Poland have introduced or mandated B2B e-invoicing, with more countries following under the EU's ViDA initiative.
- Latin America: Brazil's NF-e and Mexico's CFDI require invoices to be authorized by the tax authority at the moment of issuance.
- Middle East: Saudi Arabia (ZATCA) and the UAE require cryptographically signed e-invoices with near-real-time reporting.
- Asia-Pacific: India requires an Invoice Registration Number (IRN) from a government portal before an invoice is legally effective.
If you sell in any of these markets, compliance requires software that integrates with the relevant authority's API or network.
No registration threshold alerts
Amazon does not monitor your sales by market or alert you when you approach a registration threshold. This affects every market you sell in: the €10,000 EU OSS threshold for cross-border B2C sales, the US economic nexus thresholds (typically $100,000 or 200 transactions per state), AUD 75,000 in Australia, and £90,000 for UK VAT. You can cross any of them without realizing it and accumulate a tax liability for months with no legal cover.
No international tax filing
Amazon files US sales tax returns automatically through marketplace facilitator laws. Outside the US, submitting returns to each tax authority — the EU OSS quarterly declaration, a GST return in Australia or Canada, or any other international jurisdiction — is always the seller's responsibility.
If you would rather not manage all of this manually, the Quaderno plugin for Amazon automates each of these points.
Stop managing taxes manually on Amazon
Quaderno handles compliant invoices, e-invoicing, threshold alerts, tax reports, international filing, and multi-channel management — wherever you sell.
Discover the Quaderno plugin for AmazonThe Quaderno plugin for Amazon
The Quaderno plugin for Amazon covers exactly that manual work. Here is what it automates and how it compares to the other options on the market.
Features
Tax-compliant invoices, automatically. With every sale, an invoice is automatically sent with all required fields, in the buyer's language and currency, compliant with the tax rules of their jurisdiction.
E-invoicing compliance. For markets that require structured digital invoicing, the plugin generates and transmits invoices in the required format, without additional integration work on your end.
Registration threshold alerts. The plugin monitors your sales by region and alerts you before you reach the EU OSS threshold, a US state economic nexus limit, or any other registration trigger, so you can act before it becomes mandatory.
Instant tax reports. With one click you get a report with the totals by country and rate, ready to complete any standard tax return.
International tax filing. Quaderno files tax returns in more than 50 countries: the US, Australia, Canada, Singapore, New Zealand, and the entire EU, among others. You do not need to log into each authority's portal — Quaderno handles the submission for you.
Multi-channel management. If you sell across multiple channels — Amazon, Shopify, WooCommerce, PayPal, or others — Quaderno centralises all your tax data in one place, without managing each platform separately.
Comparison
| Plugin | Automatic invoices | E-invoicing | Threshold alerts | Tax reports | Tax filing |
|---|---|---|---|---|---|
| Quaderno | Yes | Yes | Yes | Yes | Yes |
| Amazon (native) | No | No | No | Partial | US only |
| AvaTax (Avalara) | No | Partial | Yes | Yes | Yes |
Amazon handles tax collection in the US, EU, and UK, but does not generate fully compliant invoices, does not cover e-invoicing mandates, and only files returns in the US. Avalara covers more markets but is oriented to large enterprises: the setup is more technical, pricing is not public, and the cost is difficult to evaluate for a mid-size operation.
Stop managing taxes manually on Amazon
Quaderno handles compliant invoices, e-invoicing, threshold alerts, tax reports, international filing, and multi-channel management — wherever you sell.
Discover the Quaderno plugin for AmazonNote: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the official Department of Revenue.