Amazon’s COS (Call-off Stock) programme is closed – what are your options now?

In June 2024, e-commerce giant Amazon announced that its Call-Off Stock programme was set to close on Thursday 1 August 2024.  

This programme was intended as a solution for managing and optimising product inventory, with the advantage of being able to sell in Europe with just one VAT number.  Since its closure, sellers now have to adapt to new changes in the logistics and storage of their products. 

What was the Amazon COS programme? 

The Call-Off Stock programme was based on a Europe-wide legislative simplification which allows selling partners to store inventory in a country enrolled in Pan-European FBA (Germany, France, Italy or Spain) without needing a VAT registration number in that country.

What were the requirements for Call-Off Stock?

Per European regulations, you must have met the following legislative requirements to qualify for the COS programme when it was available:

• You must be VAT-registered in at least one of the four European countries
• You must adhere to VAT reporting requirements in the country in which you are VAT-registered from where the goods are dispatched.
• You must have no Place of Establishment (PoE) in a country where you have enabled COS.
• You must know the “intended acquirer” (in this case, Amazon), who will eventually procure your inventory stored under COS.

What were the benefits of Amazon COS?

This initiative was designed to improve product availability and customer satisfaction through efficient stock management. Some of the benefits of the programme were: 

• Inventory management: Ensured products are available when customers need them, minimising ‘out of stock’ situations. 

• Optimisation: Improved accuracy in demand forecasting and inventory management, reducing storage costs and improving operational efficiency. 

• Collaboration with suppliers: Maintained a constant flow of products by working closely with suppliers. 

• Simplified taxation: It meant the need for a single VAT number to sell across Europe. 

What do the changes mean for you if you already use Amazon COS?

With the closure of Amazon COS, Amazon has outlined a transition plan for sellers: 

1. Sale of existing inventory: Until 1 August, sellers could continue selling existing inventory under the Call-Off Stock (COS) programme, using Amazon’s domestic logistics rates. 

2. No ‘new country activation’: Activating new countries under the COS programme is now cancelled. 

3. New rates: As of 1 August, European Logistics Network (EFN) rates apply, instead of Amazon’s domestic logistics rates in countries previously enabled under the Reserve Stock Program. 

4. Pan-European programme: To continue stocking inventory in the countries where COS was used, and benefit from Amazon’s domestic logistics rates, you must register VAT numbers to activate the Pan-European programme. 

How to prepare for the end of the Call-Off Stock programme

As we mentioned above, to continue to store inventory in countries where you’ve used Call-Off Stock and receive domestic FBA fees, you can enable Pan-EU FBA through VAT registration number (VRN).

To avoid any disruptions, ensure you activate Pan-EU FBA by registering for VAT in the relevant EU countries by August 1 2024. Failing to do so will result in Amazon facilitating the return of any Call-Off Stock inventory to the country where the inventory was originally inbounded, at no additional cost, by August 31 2024.

Act now to benefit from fee reimbursement from Amazon

Getting VAT numbers in the countries where you had enabled Call-Off Stock may take some time.

Until Friday 1 November 2024, Amazon are offering a reimbursement of €440 per country in any of the countries where you previously had Call-Off Stock enabled – specifically in Germany, France, Italy, or Spain, plus the Netherlands (which is a requirement now). This is for those who register for the relevant VAT numbers, and activate the Pan-EU FBA programme from now until 1 November.

This reimbursement covers:

• The expenses of registering for VAT numbers
• The associated tax filing for a duration of 12 months

If you activate Pan-EU FBA between 1 August and 1 November 2024, Amazon will compensate for the difference in fees between the EFN and the domestic FBA fees for items that were part of the COS programme.

The 2 main tax implications for COS sellers:

Having inventory stored in an EU country, without a VAT number from that country, carries administrative penalties.  

Once the COS programme ends, all sellers who have not sold all their stock will incur the following tax obligations: 

1. Getting the relevant VAT number(s): If you want to continue storing in EU countries, you’ll need to obtain a VAT number from the country or countries before 1 August. You will also be obliged to make and submit declarations for the remaining products in the country from the date of entry of the products. 

2. Making and submitting the relevant declarations:  
   • If you want to withdraw the goods from the country or countries where you’ve stored inventory, you must make and submit the declarations for the goods not sold through COS in the country of storage. This applies from the date of entry of the goods until the date you remove them.  
   • This means you must declare the period that the goods have been in storage. 

4 suggestions for sellers

If you’re a seller, it’s crucial to prepare for these changes as soon as possible, so we recommend that you:

1. Sort your VAT number registration: Make sure you register the VAT numbers required to participate in the pan-European programme.
2. Get expert tax advice: Get in touch with AVASK’s tax advisors so that we can provide you with a quick solution.
3. Do an inventory review: Evaluate your current inventory, and plan how to manage it under the new tariffs and logistics structures.
4. Speak to Amazon: Stay in communication with your Amazon representative to better understand how these changes will impact your business, and what support is available.

Act now! 

Now’s the best time to adapt and benefit from Amazon’s new logistics structures. The key is to prepare in advance and use all available resources for a smooth transition. 

Frequently asked questions about Amazon’s COS closure