The tax is huge! Attention Amazon sellers! This site RFC starts to deduct income tax!

The tax is huge! Attention Amazon sellers! This site RFC starts to deduct income tax!

More than a month has passed since the Mexican tax reform controversy. Amazon said that income tax withholding occurs before the 10th of the following month after the end of one month's sales, calculated at 20% of the previous month's sales. Sellers can check payment reports and monthly invoices on their accounts to find out the previous month's income tax amount.




Mexico tax withholding has begun! In recent days, many sellers have reported that Amazon has begun withholding Mexican income tax and value-added tax, and the amount of tax withheld is huge. Sellers, are your RFC tax numbers ready?


For sellers who uploaded RFC tax number certificates, the Amazon platform refunded the withheld VAT.


RFC tax deduction frequently asked questions!

1. With such a huge amount of taxes, how does Amazon calculate income tax?


1. Sellers who have not registered an RFC tax number:

Amazon calculates a 20% income tax based on the seller’s total sales for the month.


2. Individual registered sellers have registered RFC tax number:

Amazon will calculate income tax at a rate of 0.4%-5.4% based on the seller's total sales for the month, and sellers are required to declare it on their own.

3. Entity/corporate registered sellers have registered RFC tax numbers:

Amazon will not withhold any income tax on the seller's total sales for the month. Sellers are required to pay and declare it on their own.


Since income tax is reported monthly, when the reporting period comes, Amazon will calculate the amount of income tax payable based on the seller's total monthly sales, release all the amounts in the untransferred amount as income tax, and then charge income tax to the seller's seller account. Income tax charges will be displayed in the seller's payment report and monthly invoice.


2. Why does Amazon still deduct taxes after uploading the RFC tax number?



Some sellers reported that they uploaded their tax numbers to the Amazon platform, but taxes were still deducted from them. The official explanation of the Amazon platform is: For sellers who provide invalid information or whose RFC registration information is inconsistent with the seller's backend information, Amazon may take measures such as withholding the highest tax, revoking sales permissions, and terminating sales accounts.


3. What is Amazon’s policy regarding VAT deduction and refund?



1. For sellers without RFC tax numbers, Amazon will charge 16% VAT on the sales price of each order .

2. For corporate sellers who have uploaded their RFC tax numbers, Amazon will fully refund the VAT withheld from your sales price , and the seller will declare and pay it to the Mexican tax authorities.

3. For individual sellers who have uploaded their RFC tax numbers, Amazon will refund 50% of the VAT withheld from your sales price to the seller, who will then declare and pay the tax to the Mexican tax authorities and remit the remaining 50% directly to the Mexican tax authorities.





Registering for a Mexican RFC tax number brings many benefits to sellers:


1

Amazon will not withhold VAT and income tax on sales.


2

Sellers can use cost invoices to offset VAT as much as possible, thereby reducing tax costs.


3

By registering a local company in Mexico, you can also apply for import qualifications, use your own tax number for customs clearance, and deduct import value-added tax, which will reduce the tax cost of subsequent operations.



(Source: FBA Information)

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