With the Amazon Vine program, it is possible for companies selling via AMAZON to get customer reviews on their products. The reviews are provided by a specially selected group of trusted Amazon customers.
The program was developed for approved Amazon customers, and it works in such a way that it is possible for companies to send a free product to this selected group of customers in return for receiving an honest review.
The companies use Amazon Vine to test products before they are launched on the platform and to increase sales and visibility.
A good and informative review from – and the more of them – helps to improve the product’s position and ranking on Amazon.
Amazon Vine and VAT handling
If you use Amazon Vine, you must be aware of correct VAT handling. With the Amazon Vine program, your items are given to a customer for free, in return for a review. So there is a supply of good in return of a non-monetary consideration. These transactions appear in the Amazon data output with the value 0.
In our opinion, this is a supply (of the goods) for a consideration (the review):
• The reviews (remuneration) have concrete value (the value of the item), and
• The framework ensures that reviews are actually made.
There is a direct link between the supply and the consideration because the supplier expects something in return for his supply and would not fulfil his obligation unless he thought that payment (the review) would be forthcoming.
This above assessment (supply of goods for a non-monetary consideration) has taxable consequences. Sales tax must be calculated on the value of the goods. The value of the goods is the value of the consideration.
Thus, this is not a VAT-free advertising goods i.e. gifts given freely to all interested.
