Amazon customers in Israel have received notification from the company they will begin to pay VAT starting on July 1, the company has announced — but Israel’s Tax Authority seems to be unaware that Amazon has arrived.
The move is part of a global plan to align international billing with international taxation regulations, and in accordance with those parameters, bill customers in Europe, Africa and the Middle East for VAT.
As part of the plan, this past March Amazon was registered in Israel with the Israel Tax Authority, and created a subsidiary to serve as a licensed dealer and issue invoices to its Israeli customers.
Amazon and Amazon Web Services (AWS) are both run independently, and without any particular connection between the two, according to Globes.
“Greetings from AWS,” Amazon wrote in its e-mail, in which it notified customers, “Starting on July 1, all of the issuing of invoices and payment of your accounts in Europe, the Middle East, and Africa will be provided through our European AWS unit (AWS Europe).
“How will this affect you?
“…The invoices will include VAT for invoices in Belgium, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Luxembourg, the Netherlands, Poland, Portugal, Spain, Sweden, Switzerland, and the UK.
“The customer agreement with AWS has been revised. AWS Europe will replace Amazon’s cloud computing services as a party in the contract on invoices in Europe, the Middle East, and Africa. By continuing to use AWS’s services after July 1, 2018, you are thereby consenting to be a customer under this revision, which you can view here.”
The plan still seems to be rough around the edges, however: many Amazon cloud-computing customers concerned they won’t be able to deduct the VAT were told that through an invoice billed through the Amazon branch in Israel, they would indeed be able to received a VAT credit. Or, they could deal with Amazon in the U.S., or Europe.
According to Globes, sources at the Israel Tax Authority seemed to be entirely unaware of Amazon being registered or intending to be registered in Israel, much less already reporting to the Tax Authority.
Confusion, much?
