New taxes? Amazon announces it will pass the tax on to sellers

There are few companies like Amazon that offend both regulators (governments) and users (sellers and consumers) and yet can make more and more money. Amazon not only evades its own tax responsibilities within the legal scope, but also passes various costs on to sellers.

Recently, Amazon has done something similar again and announced it openly - passing on the additional costs of the digital tax that will be levied in the UK in the future to third-party sellers.

Details of the UK digital tax

Sellers who often follow our European site should know that this is not the first time that digital tax has been associated with Amazon. In July this year, due to the trade dispute between Europe and the United States, the United States began to implement punitive tariffs on Airbus, and France's counterattack was to impose digital service taxes on American companies such as Facebook and Amazon, referred to as digital taxes.

After implementing the 3% digital tax, Amazon notified all sellers on the French site by email that due to the French government's imposition of a digital tax, we need to simultaneously increase the overall commission rate by 3%.

Amazon has simply passed on the 3% digital tax to sellers. Amazon will not pay a cent of the digital tax originally levied on major Internet giants. This is in line with the world's richest man's stingy temperament. After all, even the United States itself cannot make Amazon pay taxes properly.

However, this growth did not last long, because after all, France used digital tax to counter the tariffs imposed by the United States. After the two sides shook hands and made peace at the G7 summit, the digital tax was immediately canceled.

However, this time, the UK's digital tax is a serious policy, not a means of confrontation. The British government will introduce the digital services tax into the parliamentary budget on March 11, imposing a 2% digital tax on Internet companies operating in the UK, including Amazon.

When the UK announced its budget, an Amazon spokesperson immediately jumped out to say that this policy would not affect Amazon's investment plans in the UK and that the costs of the tax would be transferred to third-party sellers.

It is so shameless and aboveboard, and the sellers have no choice anyway. Amazon has been doing this for a long time, and every time it treats third-party sellers as leeks that can never be cut. As the leeks that are cut, how can we survive this tax?

According to information released by the British government, this tax will be officially levied starting in April this year. Following Amazon's practice last year, our sellers' commission will increase by 2% after the implementation of the digital tax. The original commission rate of 15% will be 15.3% (15%*102%) after the increase.

It seems that the overall cost increase is not much, but according to the definition of digital service tax, not only commissions need to be taxed, but other paid services are also within the scope of taxation, such as LD and monthly rent. These specific fees may be added when Amazon officially announces the fee changes, and the total amount will not be a small amount.

This time is not like the French case, where the sellers will cancel after a round of fighting. Sellers with little profit margins will have to think carefully next year. The costs are already very tight, and now the overall cost increase is even more desperate.

According to the trend, the UK will not be the only country to collect digital taxes, and the EU will also gradually join the taxation ranks. If sellers on the European site want to survive well next year, adjusting their profit margins is a key task.