Average time to complete: 5-7 minutes
Estimated difficulty rating: Medium (Best to involve your accountant)
***DISCLAIMER***
The team at Link My Books are happy to provide users with technical assistance in applying tax rules to their Link My Books setup. We are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice. We highly recommend that users seek advice from qualified accountants for their tax compliance.
***END DISCLAIMER***
The last thing you need to do before you start sending Amazon settlements to Xero or QuickBooks, is to choose which Accounts and Tax Rates you want to assign to the different Amazon transaction types.
You need to check with your accountant that you have this set up correctly BEFORE you start sending settlements to Xero.
>>>For European region Amazon accounts, with UK version of Xero and who are filing UK VAT returns through Xero
(All other accounts please scroll down)
After connecting to Amazon and Xero you will be redirected to the 3 step Accounts & Taxes wizard, as shown below.
Step 1: Choose a Xero account for each Amazon Transaction Category
Amazon settlements can contain hundreds of different transaction types. Link My Books groups these different types of transactions into the transaction categories shown on your screen.
During this step you need to select an account for each transaction category. You can choose to use existing accounts from within your Xero chart of accounts or you can use our default set of accounts if you prefer. If you choose to use ours then we will add them to your current chart of accounts in Xero for you.
If you are unsure what a category is then hover over the “I” icon beside it’s name to reveal more detail.
Once you have selected an account for each category, press next to continue.
Step 2: Select which countries you hold VAT registrations in
In order for Link My Books to correctly allocate your chosen tax rates we need to know where you hold VAT registrations.
During this step please select all of the countries you hold VAT registrations in from the list shown here:
If you only hold a UK VAT registration or you are not registered for VAT at all then select the last option, shown here:
Step 3: Choose your tax rates for each Transaction Group
Lastly you need to choose the tax rates you would like to apply to the different transaction categories.
We pre-fill the tax rates with our sensible defaults for you. These rates apply for most sellers, but you are responsible for ensuring that they apply for your specific business too.
Our sensible defaults assume:
- UK is your primary VAT registration
- All VAT registration numbers you hold have been given to Amazon via seller central
- Where you have not exceeded the distance-selling threshold for one or more of your VAT registered countries, you must ensure that you have duly informed the relevant tax authorities to immediately tax your distance sales and opt out of any distance selling thresholds. (See this article for more details)
Each transaction category is explained in more detail when you hover over the ❓ icon beside its name.
Once you click "Confirm Tax Rates" you will be asked to confirm one final time that they are correct and that you have checked them with your accountant:
After completing this step you will be redirected to the settlement dashboard and once your settlements have refreshed you will be able to begin sending them to Xero.
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>>>For all other accounts
After connecting to Amazon and Xero you will be redirected to the 2 step Accounts & Taxes wizard, as shown below.
Step 1: Choose a Xero account for each Amazon Transaction Category
Amazon settlements can contain hundreds of different transaction types. Link My Books groups these different types of transactions into the transaction categories shown on your screen.
During this step you need to select an account for each transaction category. You can choose to use existing accounts from within your Xero chart of accounts or you can use our default set of accounts if you prefer. If you choose to use ours then we will add them to your current chart of accounts in Xero for you.
If you are unsure what a category is then hover over the “I” icon beside it’s name to reveal more detail.
Once you have selected an account for each category, press next to continue.
Step 2: Choose your tax rates for each Transaction Category
Lastly you need to choose the tax rates you would like to apply to the different transaction categories.
Each transaction category is explained in more detail when you hover over the ? icon beside its name.
Once you have chosen tax rates for each category click Confirm Tax Rates to complete setup.
Once you click "Confirm Tax Rates" you will be asked to confirm one final time that they are correct and that you have checked them with your accountant.
After completing this step you will be redirected to the settlement dashboard and once your settlements have refreshed you will be able to begin sending them to Xero.
>>>The Advanced Way (Greater Flexibility)
Once you have completed the initial account and taxes set up wizard you will have the chance to further fine tune your accounts and tax settings on the Accounts & Taxes page.
Here you will be able to select an Account and Tax Rate for each of the different Amazon Settlement Transaction Types.
The Transaction Types are displayed grouped in our high level categories:
Amazon Sales
Amazon Refunds
Amazon FBA Inventory Reimbursement
Amazon Seller Fees
Amazon FBA Fees
Amazon Storage Fees
Amazon Advertising Costs
Amazon Sales Tax (North American seller accounts only)
Amazon Loans
Amazon Reserved Balances
You can click the Expand All button to reveal all of the individual transaction types and set accounts and tax rates for them individually.
When selecting an Account and Tax Rate you can either choose to Inherit from parent or set an Account/Tax Rate to be Explicit.