Occasionally, your Amazon settlements may include amounts for Import VAT and Custom Duties. However, the raw data received from the sales channel sometimes presents these components as a single, combined figure rather than separating them.
For instance, if you have Amazon Fees mapped to Expenses 20%, the combined data might appear within your settlement as part of a single fee line:
Why Manual Adjustment is Needed
When Link My Books sends this combined data to your accounting software (Xero or QuickBooks), it will create a single line item. To correctly categorise these amounts for accurate financial reporting, you will need to manually edit the corresponding invoice (in Xero) or journal entry (in QuickBooks).
The process involves:
Finding the Breakdown: Referring to your sales channel's specific reports to clarify the individual amounts for Duty and VAT.
Deleting the Original Line: Removing the pre-existing, combined line in your accounting software
Adding Separate Lines: Replacing it with two distinct lines: one for Duty and one for VAT.
Allocating Accounts: The Duty component should typically be allocated to your Amazon Fees account, and the VAT component to your VAT Account (or appropriate tax liability account).
Step 1: Obtain the Detailed Breakdown (CDS Entry Document)
To get the precise breakdown of Import VAT and Custom Duties, you'll typically need to access the CDS Entry Document (or equivalent customs compliance information) from your Amazon Seller Central account:
Log in to Amazon Seller Central.
Navigate to Inventory > Shipments.
Open the specific shipment related to the settlement in question.
Select 'Step 3 - Add customs information and print box labels'.
Within this section, look for the 'Customs Compliance' section or a link to the CDS Entry Document. This document will detail the separate amounts for Import VAT and Custom Duties.
Step 2: Manually Adjust the Invoice/Journal in Xero or QuickBooks
Once you have the precise breakdown of the Duty and VAT amounts, you can manually adjust the corresponding entry in your accounting software.
Access the Invoice/Journal: Open the relevant invoice (Xero) or journal entry (QuickBooks) that contains the combined Import VAT and Custom Duties amount. This entry would have been created by Link My Books for that settlement.
Delete the Combined Line: Remove the existing line item that represents the combined Import VAT and Custom Duties.
Add New Lines: Add two new, separate lines to replace the deleted one:
Line 1 (for Duty):
Description: "Custom Duty for Shipment [Shipment ID]"
Account: Allocate to your Amazon Fees account (or equivalent expense account).
Amount: Enter the specific amount for Duty as identified from the CDS Entry Document.
Tax Rate: Set to 'No VAT' or 'Out of Scope' (or equivalent, as customs duty is typically not subject to standard VAT).
Line 2 (for Import VAT):
Description: "Import VAT for Shipment [Shipment ID]"
Account: Allocate to your VAT Account (or appropriate VAT control/liability account).
Amount: Enter the specific amount for Import VAT as identified from the CDS Entry Document.
Tax Rate: Apply the appropriate Import VAT tax rate (e.g., 'Import VAT 20%').
Save Changes: Save the changes to the invoice/journal entry in Xero or QuickBooks.
⚠️ Important Disclaimer: Consult Your Accountant
The guidance provided above is for informational purposes only. VAT regulations, customs duties, and accounting practices can be complex and are specific to your jurisdiction. You should always seek the advice of your accountant or a qualified tax professional to ensure these adjustments are made correctly and comply with all current tax laws applicable to your business.
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