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How to Calculate VAT in AdLabs

How VAT deductions work and and why EU and UK profiles are different

Add VAT % to your Profiles

Under “Manage Profiles,” enable the VAT column, then add the appropriate percentage.

How Amazon Calculates VAT in the EU vs. UK

Amazon does not handle VAT the same way across regions. This matters because it changes which metrics AdLabs adjusts when you set a VAT rate.

For EU profiles, Amazon includes VAT in both Ad Sales (from the Ads API) and Total Sales (from Seller Central). AdLabs deducts VAT from both.

For UK profiles, Amazon already excludes VAT from Ad Sales. But Total Sales from Seller Central still includes it. AdLabs only deducts VAT from Total Sales/Seller Central metrics.

Why Are My Sales Lower in AdLabs Than in the Amazon Ads Console? (EU/UK VAT)

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If clicks, orders, and spend match between AdLabs and Amazon Ads Console but sales are lower (and ACOS higher), and you're a Seller in an EU or UK marketplace, this is a VAT setting issue, not an attribution or sync issue.

Why It Happens

Amazon reports EU sales gross of VAT across the board. For UK profiles, Amazon already strips VAT from Ad Sales but still includes it in Seller Central/Total Sales.

If you've set a VAT rate on the profile, AdLabs deducts it from the relevant sales figures:

AdLabs Sales = Amazon Sales ÷ (1 + VAT rate)

Spend, clicks, impressions, orders, and units are never adjusted, because Amazon doesn't add VAT to those. That's why only the sales column moves, and why ACOS reads higher (for EU profiles), since only the denominator shrinks.

How to Confirm It

Divide the Amazon sales figure by the AdLabs one. If it matches your VAT rate, that's your answer.

Example calculation below.

Amazon Ads Console

AdLabs

Clicks

194

194

Orders

61

61

Spend

€173.97

€173.97

Sales

€515.86

€429.88

ACOS

33.72%

40.50%

Amazon Sales ÷ AdLabs Sales

€515.86 ÷ €429.88 = 1.20

→ 20% VAT

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This example is from an EU profile where VAT applies to Ad Sales. For UK profiles, your Ad Sales and ACOS will match Amazon exactly. The difference will only show in Seller Central/Total Sales and TACOS.

Setting Your Target ACoS in the EU

With VAT on, every ACoS in AdLabs, including the one the bid optimizer works against, is net of VAT.

Set your Target ACOS on that same net basis.

For example, a target carried over from gross Ads Console numbers will make the optimizer bid more conservatively than you intend.

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For UK profiles, ACOS is unaffected by the VAT setting so your target ACOS does not need to change. TACOS targets should be adjusted since Seller Central sales are now net of VAT.

Looking for how to update VAT for your AdLabs account for billing purposes? See below.

How to Update VAT for Billing

Adding and making changes to VAT

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