A large number of Amazon accounts were subject to tax audits, and a big seller was fined $2 million!

The Spring Festival is approaching, and a year of hard work on the cross-border journey is finally coming to an end. Although sellers have returned home for the Spring Festival, Amazon is still "open all day". After launching a number of new policies at the front desk, it has begun to settle accounts and clean up local accounts. Affected by this, a huge wave of tax repayment has been set off on the European site recently.

At the beginning of the new year, another round of tax inspections came uninvited on Amazon's European site.

Tax audits have always been a key concern for the European site, and Amazon has always maintained a tough attitude towards this: anyone who evades or avoids taxes will be punished no matter how far away they are. It is understood that since Q4 2023, the European site has experienced three rounds of tax audits, namely in September before the peak season, in November during the peak season, and now in January after the peak season ends.

It is reported that since January 16, a large number of European local accounts have been investigated for tax and their funds have been frozen. According to sellers' feedback, this round of cleanup mainly targets old accounts before January 2021. If the seller fails to provide written evidence within the specified time, the platform will determine that the seller has no actual business in Europe and will start to collect and pay VAT on the seller's B2C sales.

Specifically, the accounts that were subject to tax audits mainly involved the following issues: First, sales were high but not reported or were under-reported; second, the local company behind the store was already deregistered; third, affected by the DAC7 Act, the tax bureau began to audit and check taxes on stores that had already submitted information.

Given the fierceness of this round of tax inspections, a large number of European sellers have been affected, and many have even suffered heavy losses:

"My client was also blocked in mainland France, worth several million euros, and is now being unblocked."

"One freight forwarder said his client lost 63 numbers and suffered a loss of 200 million yuan."

"At least 10,000 accounts have been blocked, and the amount of money involved is very large."

As this tax inspection happened at the end of the year, many cross-border companies suddenly received tax payment notices from Amazon. In addition, since the amounts involved for some companies were huge, it even affected the year-end benefits of their employees.

An employee of a cross-border company revealed that his company's UK store was recently investigated and punished for not paying taxes in 2020, and was required to pay more than 50,000 pounds in taxes and fines (approximately RMB 500,000).

To this end, the company boss deducted more than 60,000 yuan from the employee's year-end bonus this year to make up for the tax loophole, on the grounds that the 20 years of commissions were paid out of the profits of the UK site.

In addition, several big sellers have recently received relevant tax payment notices. For example, in the second round of tax inspections in November last year, Ninebot announced that its subsidiary SDEBV was required by the Dutch Customs and Finance Department to pay 549,100 euros in industrial product tariffs, 5,682,800 euros in final anti-dumping duties, and 1,573,900 euros in final countervailing duties.

Of course, tax risks do not only exist in the European market. Recently, Shenzhen Dasai Xinghui Co., Ltd. received a tax payment notice from the US tax department.

The announcement shows that the subject involved is STK, a subsidiary of Zebo Technology established in the United States. The tax years involved in the payment notice are 2016-2021, and the tax-related matters involve the period before the merger and acquisition delivery date and the performance betting period. According to the relevant US tax department, STK has not paid the sales tax in full, and was therefore fined a total of US$2.3784 million in taxes and fines.

Based on the above cases, tax issues have always been a key minefield to beware of in cross-border sales. And as the platform tends to develop towards compliance, Amazon has become more and more strict in reviewing the local store information of Chinese companies. Therefore, sellers still need to abide by basic principles and eliminate tax loopholes.

Every Chinese New Year, the year-end bonus is undoubtedly the focus of the cross-border job circle. However, the increase in the instability of the industry environment in the past year has also led to the year-end bonuses of sellers being constrained by many factors, such as the company mentioned above using the year-end bonus to make up for taxes, and canceling the full-year bonus due to unsatisfactory performance, which can be said to be a thorn in the side of many cross-border people.

An Amazon operations manager working for a billion-dollar sales company revealed that his year-end bonus was unfortunately canceled because profits did not reach the expected 30% growth target.

Nowadays, the days when cross-border companies gave out year-end bonuses of millions seem to have become a thing of the past. Instead, a large number of sellers have missed out on year-end bonuses due to poor performance, and some have even received no commissions and are only receiving a year's base salary.

"We deduct 20,000 yuan, and the remaining 6 points, and then deduct another 5 points from the commission, and the year-end bonus is nothing."

"I cleared out the goods from half a year. I didn't lose too much, but I still lost money. I didn't see my year-end bonus."

"There is no year-end bonus, no annual meeting, and I have to make various adjustments to my shifts until the New Year's Eve holiday, and I have to make do with the holiday in a crooked way,"

"There is no notice for the Chinese New Year yet, and no benefits. I heard from old employees that there are no bonuses for returning to work at the beginning of the new year. The Chinese New Year is based on the government's rules, and performance reports are required every day, but there are no rewards/subsidies."

"The year-end bonus I give myself is a reward for leaving the job after the new year." A seller sighed helplessly.

As we all know, the salary and benefits system of cross-border e-commerce has always been based on performance. The more outstanding the performance, the richer the salary and benefits, and vice versa.

2023 is a turbulent and extraordinary year for the cross-border industry. The complex and ever-changing external environment has posed more stringent challenges to cross-border practitioners. As a result, many small and medium-sized cross-border companies have failed to fully resist various risks due to the lack of solid barriers, and their performance has once fallen into a dilemma of decline or even insufficient income.

Faced with performance losses or failure to meet targets, reducing costs and increasing efficiency has become the common choice of many cross-border companies. As a result, bonuses are far from being achieved during the year-end review. Some companies have even started year-end layoffs to further increase revenue and reduce expenditure in order to avoid further widening of performance gaps.