Amazon was investigated for sales tax? Officials forced to pay $265 million

Amazon has been plagued by tax problems in the past two days. First, the California court summoned the relevant departments of Amazon for a meeting.

At present, the sales tax in the United States has been basically rolled out across the country. When a seller successfully sells a product to a consumer in a certain state, the sales tax will be collected according to the sales tax rate and relevant regulations of the buyer's state. The California court is currently communicating with Amazon on two issues: one is to require Amazon to exchange data with the California Department of Taxation on the collection of sales tax; the other is to clarify whether the tax payment obligation lies with Amazon or with the large, medium and small sellers on the platform.

Currently, the consumption tax on Amazon is paid by the platform. Once an order is placed, the platform automatically calculates the tax and deducts it from the amount received.

The calculation and payment process is relatively silent, and there is no reminder for orders that generate taxes. Therefore, some sellers who are not familiar with their costs may not be aware of this tax. In addition, the California government means that Amazon currently interferes too much in the entire collection process , and wants to kick Amazon out of the process and let the sellers on the platform pay the taxes themselves.

I thought about it and found that Amazon's payment method is beneficial to both sellers and the state government. Sellers don't need to do too much complicated work for the platform to automatically withhold the tax, and the state government can also receive all sales tax to California. It is reasonable that the state government should not make trouble in the payment process. Of course, there is an exception: if Amazon takes advantage of the situation, it is hard to say.

So why does the state government want to make this thankless and difficult policy of asking sellers to pay taxes themselves? The two sides are still negotiating. If the two sides fall out, we sellers may have to register for California tax numbers and pay sales taxes ourselves. You can check in advance whether you have many orders from California buyers and make preparations in advance.

Another tax issue is Amazon’s own trouble. The European Union ruled that Amazon needs to pay about 250 million euros (about 265 million US dollars) in back taxes!

The European Union yesterday asked Amazon to pay $265 million in back taxes to Luxembourg for its illegal tax avoidance practices.

Amazon's subsidiary registered in Luxembourg took advantage of a Luxembourg tax exemption policy to transfer three-quarters of Amazon's entire European revenue to the parent company in a nearly tax-free manner. The European Union said that after review, it was clearly a violation, but Amazon insisted that its tax avoidance operation was legal and requested an appeal.

The EU has always been at the forefront in dealing with Amazon. Last year, the EU was the first to initiate formal antitrust penalties against Amazon, requiring Amazon to make rectifications in accordance with regulations or else be fined up to 10% of its annual sales. Based on Amazon’s financial data last year, the amount of the fine is as high as $37 billion!

Amazon has already made rectifications according to the EU's requirements. The EU will also conduct inspections and investigations on the rectifications in the near future. It is estimated that the European site will be relatively peaceful recently.