Why doesn’t Amazon in the US use VAT? Which sites require VAT payment?

As we all know, Amazon is a cross-border e-commerce platform. So when opening a store on Amazon, you need to choose a relevant site. The products sold on different sites may be slightly different. Why doesn't Amazon in the United States use VAT?

1. Why doesn’t Amazon in the US use VAT?

The Chinese name of VAT is Value Added Tax, and the United States is one of the few countries in the world that does not have a value-added tax. When sellers on the US site register a store, as long as they do not use US company information, they do not have to pay taxes. The US site imposes consumption tax on Amazon products, and this consumption tax is borne by the buyer. Therefore, sellers on the US site basically do not have to worry about US tax issues.

Other sites, including Japan, Australia, the Middle East, and India, are basically similar to the US site. So far, only the European site requires sellers to pay VAT.

2. What are the compulsory payments?

Currently, only the European site is mandatory to pay VAT. In fact, the European site has always required sellers to pay VAT as required, but it has always turned a blind eye. Since July 2018, the five major sites in Europe have begun to strictly check the VAT payment of sellers and have carried out severe recovery. Many big sellers in European sites have to give up their original stores and start from scratch under the strong pressure of paying back VAT because of too much unpaid VAT. At present, self-delivery on the European site does not need to pay VAT if it does not exceed the limit, but if you want to have long-term development in the European site, formal operation is the only way.

Taking the UK site as an example, you must register for VAT as long as you meet the following conditions: 1. Amazon sellers

2. Non-UK sellers can store inventory in the UK and use overseas warehouses or FBA.

That is to say, as long as you send inventory to the warehouse of the UK site, whether it is FBA or overseas warehouse, you need to register and pay VAT. Amazon has sent a notice about VAT payment to each seller in the seller backend. Sellers who have not uploaded the UK VAT number within 30 days will have their Amazon account enter the review stage. If sellers still have not uploaded the UK VAT number within 60 days, their Amazon account will be forcibly closed.

In fact, different sites have slightly different operating methods and related rules. So when choosing a site, you must look at your own source of goods to see what kind of goods you have and which site is suitable for selling them.

Recommended reading:

How to open a store on Amazon US? Tutorial introduction

Does Amazon US payment account require a legal person? Related questions answered

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