The Fulfillment by Amazon (FBA) program revolutionized e-commerce. It allows entrepreneurs from all over the world, including Bulgaria, to sell physical goods to millions of customers in Europe and the US without ever touching the products. You find a winning product, order it from a factory in Asia, and send it directly to a massive Amazon warehouse (e.g., in Germany). From then on, Amazon’s algorithms handle the sales, while their employees take care of packing, delivery to the end customer, and even returns.
Sounds like the perfect business model for passive income, right? From a logistical and marketing perspective – yes. But from a tax and accounting perspective, Amazon FBA is one of the most complex endeavors a Bulgarian merchant can face in 2026.
Why? Because your goods cross international borders, are stored on foreign territory, and are sold to consumers in dozens of different countries. Each of these actions triggers specific tax events and VAT obligations under European legislation. In this highly detailed article, we will untangle the accounting knot of Amazon FBA so you understand how to structure your business legally, avoid crushing fines from foreign tax authorities, and protect your profit.
1. Do I need a company to sell on Amazon?
The first and most important step is choosing a legal form. Unlike providing digital services on a freelance basis, selling physical goods for profit is a classic commercial activity.
Attempting to sell on Amazon as a private individual is a recipe for financial disaster. If the National Revenue Agency (NRA) detects systematic receipts from Amazon in your personal bank account, it will tax you as a Sole Trader (ET). This means paying a 15% income tax, owed social and health security contributions retrospectively, and huge difficulties in proving the expenses for purchasing the goods from China.
The only correct and legal path to starting an Amazon FBA business is by registering a commercial company – most commonly an LLC (EOOD). Through an LLC, you limit your personal liability, pay a flat corporate tax of 10% on the real profit (revenue minus all costs for goods, transport, and Amazon fees), and you can legally register for VAT, which is absolutely mandatory for this model.
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2. Imports: How the goods reach Europe legally (Duties and EORI)
To start selling on the European Amazon (e.g., Amazon.de), your goods must first enter the territory of the European Union legally. Most often, products are manufactured in countries outside the EU (China, Vietnam, India).
When the container with the goods arrives at a European port or airport, your company takes on the role of “Importer”. To clear the goods through customs, you need:
- EORI number: This is a unique identification number for customs purposes, valid throughout the EU. It is issued by the Customs Agency and is mandatory for every company importing goods from third countries.
- Paying duties: Depending on the type of goods (toys, electronics, textiles), duty is owed according to the pan-European tariff.
- Paying Import VAT: At customs, VAT is also charged on the value of the goods plus transport costs. The huge advantage of having a VAT-registered company is that this paid import VAT can be refunded (tax credit) when you file your monthly VAT return.
3. The VAT trap of warehousing: Why you need a foreign VAT number
This is the moment where 90% of beginner merchants make a fatal mistake. When you use Amazon FBA, you send your goods to be stored in a physical Amazon warehouse, for example in Germany or Poland.
The fundamental rule of European tax law states: Storing physical goods for commercial purposes in a given country creates an obligation for local VAT registration in that country from Day One, regardless of the turnover!
This means that if your goods are located in a warehouse in Germany, your Bulgarian company is obliged to have a German VAT number (Steuernummer). You must hire a German accountant (or use specialized software like Amazon VAT Services) to file monthly VAT returns with the German tax office (Finanzamt).
If you join the Pan-European FBA program, where Amazon has the right to freely move your goods across warehouses in Germany, France, Italy, Spain, and Poland to be closer to customers, you will have to register for VAT in every single one of these countries. The administrative and financial burden of maintaining 5 or 6 foreign VAT numbers is massive and must be calculated in your business plan beforehand.
4. Sales to end customers: The 10,000 euro threshold and OSS
Once your goods are legally in the warehouse in Germany (and you have a German VAT number), customers start buying. How is VAT charged on the sales themselves?
Here, the EU “Distance Sales” rules come into play.
- If you sell to a German customer (from a warehouse in Germany): Since the goods do not leave the country, you charge the standard German VAT (19%) and remit it to the German treasury through your local German VAT registration.
- If you sell to a customer in France (from a warehouse in Germany): The goods cross a border. According to EU rules, there is a common threshold of 10,000 euros for distance sales within the Union. If your total sales to other EU countries exceed this threshold for the calendar year, you are obliged to charge VAT according to the rate of the country where the customer is located (in this case 20% for France).
So you don’t have to register for VAT in every single country you sell to, the EU introduced the OSS (One Stop Shop)regime. Through the OSS system, you register in Bulgaria and, via a single quarterly declaration to the NRA, report all sales to end customers in Europe. You collect 20% VAT from the Frenchman, 21% from the Spaniard, and 22% from the Italian, transfer the total amount to the NRA, and they distribute it to the respective countries. For a full understanding of this system, review our article New VAT Rules in 2026 for Small Businesses in Bulgaria and the EU.
5. Amazon Fees and Reverse Charging (Art. 97a)
One of the biggest difficulties in accounting for an Amazon FBA business is the platform’s own fees. Amazon deducts money for two main things:
- Referral fee: A commission for using their platform to sell.
- FBA fee: A fee for storing, packing, and delivering the goods to the customer.
Amazon Europe (based in Luxembourg) invoices you for these services. Since your Bulgarian company receives a service from a foreign legal entity, you fall under Art. 97a of the VAT Act (even if you don’t have a general VAT registration by turnover, though for FBA it is inevitable).
When Amazon issues you an invoice for its fees, it has 0% VAT (Reverse Charge). You are obliged to “self-assess” 20% Bulgarian VAT through a so-called protocol for reverse charging. Since your company will be VAT registered, this tax usually comes with the right to a full tax credit. The concept is complex, but you can understand it fully in the article What Does Reverse VAT Charging Mean?.
6. Do I need a cash register?
One of the most frequently asked questions is: “Since I sell physical goods, do I need a cash register under Ordinance N-18?”.
The answer is: No, you do not need a Bulgarian fiscal device. The reason is twofold:
- Sales via Amazon are carried out entirely cashless (via cards and digital wallets), which allows the use of an alternative reporting method.
- And more importantly – the sales are realized outside the territory of the Republic of Bulgaria (from a warehouse in Germany to a client in France). The Bulgarian Ordinance N-18 for cash registers regulates sales on the territory of the country. Since the goods never even set foot in a Bulgarian warehouse, you are not subject to these requirements. For the specifics of e-commerce stores in Bulgaria, see Regulation N-18 and E-commerce Stores: What Changes in 2025.
The Amazon FBA business is an incredible opportunity to build a global brand from your laptop in Bulgaria. But it is not for people looking for “quick money with no administration.” EU VAT regulations are strict, uncompromising, and require serious upfront investment in accounting infrastructure.
