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It is learned that in April this year, Amazon Europe issued a reminder announcement about the EU DAC7 Directive: The directive requires sellers selling products in the EU to provide administrative compliance information before October 1, 2023. If they fail to provide the required information as required, their Amazon accounts may be deactivated and their funds may be withheld. It can be seen that with the changes in tax policies of EU countries and cross-border e-commerce platforms, the platforms' tax compliance reviews of accounts have become stricter. Although the UK has withdrawn from the EU, judging from recent developments, Amazon has also tightened its tax review of its UK site. Second Thunderstorm! Funds of multiple UK local accounts were frozen! In the previous article "Breaking! Amazon UK VAT exploded, and a large number of sellers' funds were frozen", it was mentioned that on September 4, many sellers' Amazon UK local accounts had value-added tax withheld and paid on their behalf, and some sellers' account funds were even directly frozen. It is understood that Amazon began to withhold VAT on September 1. After verification by sellers, most of the UK accounts with frozen funds were registered with HMRC because of their VAT addresses . According to the UK VAT e-commerce legislation, Amazon will assume that the company is a non-UK company and withhold all taxes according to the foreign company regulations. At that time, except for some sellers who were caught off guard, most sellers said that there were early signs that Amazon's VAT withholding policy would become stricter, and that the status of UK local accounts would continue to be investigated for some time to come. A few days ago, a seller revealed that on September 13, the funds of a large number of sellers on the UK site's local accounts were frozen again. ▲ The picture comes from Zhiwubuyan Judging from the emails Amazon sent when freezing the funds, unlike most previous accounts that were registered with HMRC due to VAT addresses, the local accounts of sellers on the UK site were frozen this time mostly because Amazon's review found that the companies with the relevant UK local accounts were not actually established in the UK. In other words, when Amazon sellers register for a local Amazon account, the UK company information they provide is actually a "shell company." ▲ The picture comes from Zhiwubuyan It is learned that due to the complicated VAT registration process in the UK, many cross-border sellers currently use tax agents to register for VAT. In order to avoid the platform's VAT withholding requirements, some service providers will register companies in the UK, and then use these companies to register local accounts on cross-border e-commerce platforms, claiming that they can "save sellers' tax costs." But in fact, this operation is obviously not in compliance with regulations, and once investigated, the accounts of relevant sellers will be implicated. However, it is worth noting that although the account funds of many sellers have been frozen, Amazon also mentioned in the email that if the relevant sellers fail to provide relevant documentary evidence within 30 days, Amazon will determine that the sellers have not established a company in the UK and will begin to collect and pay value-added tax on the sellers' B2C sales. From the above, it can be seen that if the accounts with problems found this time pay the VAT, the accounts may return to normal soon, so the relevant sellers do not need to worry too much for the time being. But in general, as Amazon's VAT withholding policy becomes stricter, this kind of violation by exploiting loopholes in the rules is not a long-term solution. According to Amazon's habit of "repaying after the event", if the "same crime" is committed twice in the future, it may not be as simple as freezing the funds. Only compliant operations are the best strategy to maintain an unbeatable position on Amazon for a long time. It is worth noting that in recent times, the unrest in the European market does not seem to be limited to the platform's tax issues. Due to problems with overseas logistics accounts, the European freight forwarder has suspended receiving goods In recent years, cross-border logistics has been in chaos, with numerous incidents such as defaulting on customs clearance fees and running away, illegal declarations leading to the detention of goods, etc. In the chaos, not only Amazon has strengthened its review of logistics links, but also large overseas logistics companies such as UPS and DHL have also strengthened their supervision policies on accounts. Recently, according to industry sources, a European freight forwarder issued a notice to suspend receiving goods, which seems to be related to the tightening of regulatory policies for overseas logistics companies. As can be seen from the figure below, the European freight forwarder stated in the "Notice on Suspension of Receipt" that due to recent problems with the company's overseas UPS, DHL, and DPD accounts, which will take some time to resolve, the company decided to suspend receipt of goods. According to insiders, the freight forwarding company has had hundreds of containers with tens of millions of yuan worth of goods seized. Some sellers also revealed that the company has not picked up the goods for more than 80 days. We learned that, generally speaking, there are three main situations in which freight forwarders on the European line may have problems: first, they solicit cargo at low prices due to fraud; second, they fail to comply with tax regulations during customs clearance; and third, errors occur in the transportation process, resulting in a break in the capital chain. According to the notification from the freight forwarder, many sellers recalled the actions taken by UPS, Fedex and other American express delivery companies in May this year to strictly investigate issues such as stealing area and weight, and account leakage. Based on this, they speculated that logistics companies such as UPS, DHL, and DPD may have begun to expand the action of strictly investigating account leakage from the United States to Europe, and the account of this freight forwarder has been investigated. However, according to the observations of some sellers, although the tail accounts in Europe also have leakage problems, they are currently small-scale incidents and are not enough to embarrass the large-scale logistics companies. Therefore, many sellers also speculate that the freight forwarder was checked for tax during customs clearance. However, as of press time, the freight forwarder has not given a specific explanation for the suspension of receiving goods, so the above speculation can only be used as a reference , and the subsequent situation remains to be observed and understood. After the era of wild growth, the cross-border e-commerce industry has now entered a period of rational development with compliance. We would also like to remind all cross-border sellers that in addition to carefully analyzing the risks of logistics channels, they should also pay close attention to the various compliance policies of the cross-border e-commerce industry to prevent any omissions. What do you think about this? Welcome to discuss in the comment area~
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