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.
Contents
Introduction
Link My Books exists to make accounting for your Amazon (and other e-commerce channels) sales, refunds, fees and VAT easy and accurate.
That's why as part of our quick and easy setup wizard, we'll provide you with some default accounts and tax rates to confirm.
This means that you can be confident your bookkeeping is clean and accurate. Trust me, your accountant will thanks you for it.
Link My Books default accounts for Amazon
Amazon has hundreds of different transaction types, so to keep things simple we group them into 10 top level categories:
Amazon Sales
Amazon Refunds
Amazon FBA Inventory Reimbursements
Amazon Seller Fees
Amazon FBA Fees
Amazon Storage Fees
Amazon Advertising Costs
Amazon Sales Tax (all regions except Amazon Europe)
Amazon Loans
Amazon Reserved Balances
If you accept our default accounts during setup we'll create one account for each of these different categories and add them to your existing chart of accounts in Xero or QuickBooks.
Here are our default accounts:
Account Code & Name | Account Type |
LMB1: Amazon Sales | Revenue |
LMB10: Amazon Refunds | Revenue |
LMB2: Amazon FBA Inventory Reimbursements | Other income |
LMB3: Amazon Seller Fees | Expenses |
LMB4: Amazon FBA Fees | Expenses |
LMB5: Amazon Storage Fees | Expenses |
LMB6: Amazon Advertising Costs | Expenses |
LMB7: Amazon Sales Tax (North American accounts only) | Current Liability |
LMB8: Amazon Loans | Current Liability |
LMB9: Amazon Reserved Balances | Current Asset |
💡Good to know
You can, of course, choose any accounts you like during setup. Plus you can even dive deeper into the sub-categories contained within these top level categories. You can learn more about fine tuning your account mappings in this help article.
Link My Books default tax rates for Amazon Europe accounts
If you are VAT registered in the UK then we'll also provide some default tax rates for you to confirm.
Here are our default tax rates for sales revenue for UK VAT registered businesses:
Transaction Tax Category | Tax Rate |
Standard Rated Goods Shipped to UK - Seller Responsible for VAT | 20% (VAT on Income) |
Reduced Rated Goods Shipped to UK - Seller Responsible for VAT | 5% (VAT on Income) |
Zero Rated Goods Shipped to UK - Seller Responsible for VAT | Zero Rated Income |
Sales shipped to UK - Marketplace Responsible for VAT | Zero Rated Income |
Sales shipped outside UK - Dispatched from GB | Zero Rated Income |
Sales shipped outside UK - Dispatched from Outside GB | No VAT |
IMPORTANT
Amazon changed the legal entity they invoice their fees from for UK sellers in August 2024. During setup we'll give you the option to set tax rates for fees for pre and post August 2024.
Here are our default tax rates for fees for UK VAT registered businesses Pre-August 2024:
Transaction Tax Category | Tax Rate |
Amazon Fees | Reverse Charge Expenses (20%) |
Amazon Advertising Costs (EU) | Reverse Charge Expenses (20%) |
Amazon Advertising Costs (UK) | 20% (VAT on Expenses) |
Here are our default tax rates for fees for UK VAT registered businesses Post-August 2024:
Transaction Tax Category | Tax Rate |
Amazon Seller Fees | 20% (VAT on Expenses) |
Amazon Storage Fees (UK) | 20% (VAT on Expenses) |
Amazon Storage Fees (EU) | Reverse Charge Expenses (20%) |
Amazon FBA Fees (Domestic Orders) | 20% (VAT on Expenses) |
Amazon FBA Fees (International Orders) | Reverse Charge Expenses (20%) |
Amazon Advertising Costs (UK) | 20% (VAT on Expenses) |
Amazon Advertising Costs (EU) | Reverse Charge Expenses (20%) |
Here are our default tax rates for other transactions for UK VAT registered businesses:
Transaction Tax Category | Tax Rate |
Amazon FBA Reimbursements | No VAT |
Amazon Loans | No VAT |
Amazon Reserved Balances | No VAT |
💡Good to know
Again, you can change these tax rates to suit your business if you wish to do so - they are just defaults. You should only change tax rates on the Accounts & Taxes Wizard and not on the Accounts & Tax Mappings page.
To lean more about why we use these tax rates as our default tax rates see this article about the UK VAT Return For Amazon Sellers.
Link My Books default tax rates for all other Amazon region accounts
If you are VAT registered in the UK then we'll also provide some default tax rates for you to confirm.
Here are our default tax rates for sales revenue for UK VAT registered businesses:
Transaction Tax Category | Tax Rate |
Amazon Sales | No VAT |
Here are our default tax rates for fees & other transactions for UK VAT registered businesses:
Transaction Tax Category | Tax Rate |
Amazon FBA Reimbursements | No VAT |
Amazon Fees | No VAT |
Amazon Sales Tax | No VAT |
Amazon Loans | No VAT |
Amazon Reserved Balances | No VAT |
💡Good to know
Until you provide Amazon with your VAT number they will charge you 20% VAT on your seller fees and advertising fees, so ensure you enter your VAT number on all Amazon Seller Central for each region.
If you have any questions about this article or feedback on how we could make it better please reach out to the support team via the blue chat icon on the bottom right of the page or via email to [email protected].