FBA vs FBM: tax and VAT differences for Italian sellers

The choice between FBA and FBM isn’t just a logistics decision: it’s a choice with direct, often underestimated tax consequences. This article breaks down the VAT differences between the two models in detail, so you can choose with full information — or at least know what you’re taking on.

FBA and FBM: not just logistics, but tax

The choice between FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) isn’t just an operational decision: it has direct, significant implications for VAT management. With FBA, goods are sent to Amazon’s European warehouses, generating movements of goods between different EU countries, each with its own VAT rules.

With FBM, on the other hand, shipping always starts from the seller’s warehouse — typically in Italy — and the applicable VAT rules are simpler to track, even if not eliminated.

How VAT works with Pan-European FBA

The Pan-European FBA programme has the most complex VAT impact. Amazon independently distributes stock across its European warehouses (Germany, France, Italy, Spain, Poland, Czechia, the Netherlands). Every time a unit is moved from one warehouse to another, an intra-community movement of goods is generated, which must be tracked for tax purposes.

These operations fall into two categories:

• Stock Transfer / Intra-EU Transfer: goods moved from one Amazon warehouse to another in a different country. From a VAT perspective this is treated as a deemed intra-community supply and must be declared.
• Customer Sale: a sale to the end consumer in the country where the goods are stored. It generates local VAT in the country of sale, declarable via OSS.

The impact of stock transfers on the VAT Transaction Report

In Amazon’s VAT Transaction Report, stock transfers appear as rows with transaction-type = TRANSFER. These rows are not sales and don’t generate revenue, but they do create tax obligations that many sellers ignore. They must be handled separately from the OSS return, often requiring local VAT registrations in the countries involved.

VAT registration in multiple countries: when it’s necessary

With Pan-European FBA, the seller technically becomes a VAT taxable person in the countries where Amazon holds stock on their behalf. This can require direct VAT registration in those countries, regardless of whether the OSS scheme is used.

In particular:

• OSS sales only cover B2C sales to consumers in countries other than the one where the goods are stored
• Stock transfers aren’t covered by OSS and require local VAT registration
• Germany and Poland are the countries where Amazon concentrates its largest logistics hubs
• Without active registration, the seller is technically non-compliant in the countries where they have Amazon stock

FBM: simpler VAT rules

With FBM, the seller ships directly to the end customer from their own Italian warehouse. In this scenario the rules are more straightforward:

• Up to €10,000 per year of B2C sales to other EU countries: 22% Italian VAT applies
• Above €10,000: the obligation to apply the consumer’s destination country’s VAT via the OSS scheme kicks in
• No stock transfers into foreign warehouses: zero local VAT obligations tied to logistics
• Shipments originate in Italy, and VAT territoriality is simpler to determine

FBM is therefore simpler from a tax standpoint, but still requires OSS management once volumes exceed the threshold.

Tax comparison: FBA vs FBM

EFN (European Fulfillment Network): the middle ground

There’s also a third option: the EFN (European Fulfillment Network) programme. With EFN, goods stay in Amazon’s Italian warehouse but are sold on all European marketplaces. Amazon ships directly from Italy to the European customer.

From a tax standpoint, EFN is simpler than Pan-European: cross-border sales originate from Italy and follow the standard OSS rules. Stock transfers between countries are absent or very limited. The tax cost is similar to FBM, with the advantage of having logistics handled by Amazon.

How VATManager differentiates the two flows

VATManager reads Amazon’s VAT Transaction Report and automatically identifies the transaction type:

• Rows with transaction-type = SALE are aggregated under the OSS scheme
• Rows with transaction-type = TRANSFER are flagged as stock transfers to be handled separately
• FBM sales are recognised by the fulfillment-channel = MFN field
• FBA sales have fulfillment-channel = AFN

The result is a report that clearly distinguishes the two types, ready to share with your accountant.

Frequently asked questions

If I only use FBA in Italy, do I have the same stock transfer problem? No. If you only store goods in Italian Amazon warehouses and only sell on Amazon.it, international stock transfers don’t exist. The problem arises when you take part in the Pan-European or EFN programme with cross-border shipments.

Does OSS cover all European FBA sales? Only B2C sales to countries other than the one where the goods are stored. If the goods are in Germany and you sell to a German customer, that sale requires German VAT declared locally, not via OSS.

Do I need to open a VAT number in Germany if I use Pan-European FBA? In most cases yes, German VAT registration is needed because Amazon stores goods in German warehouses. Check out our guide on foreign VAT numbers.

Is FBM always cheaper from a tax standpoint? In terms of tax compliance, yes. But the full comparison needs to include logistics costs, conversion rates and the different fees between FBA and FBM.

📎 Learn more: Amazon Pan-European FBA: all the VAT obligations — Foreign VAT number: how to get one