Can Chinese sellers be exempted from VAT? The platform confirmed

Some time ago, sellers in the United States received emails from Amazon stating that the Mexican government has implemented a new tax reform and will require sellers on the Mexican site to upload their tax numbers starting June 1 , and Amazon will deduct the income tax and value-added tax (VAT) generated by the sellers.

Because the North American site is interconnected, many sellers on the US site will also do business on the Canadian and Mexican sites, and some have good sales. However, Mexico has begun to require a tax number. If you do not upload it, Amazon will directly deduct 20% of the total sales as tax.

If the sales in Mexico are not high, then it is not a big deal, just close the Mexican site. But for sellers with good sales, it is really difficult, should they register for a Mexican tax number?

Recently, there was news that the new Mexican tax policy does not target overseas sellers, and we Chinese sellers do not actually need to pay taxes!

When notifying their clients of the Mexican tariff news, some industry-related organizations said, "This tax law update in Mexico only applies to local taxpayers in Mexico and does not apply to remote sellers in China."

As soon as this news came out, all major media outlets spread it, and many sellers thought they could continue to keep their Amazon Mexico stores. But I contacted several sellers who do business in Mexico, and they found that Amazon did start to automatically withhold taxes after June. There is no such thing as "only applicable to taxpayers in Mexico". What is going on?

After checking the source of the news, I confirmed that the news came from another Latin American e-commerce platform, Mercado Libre. The news is indeed true, and the platform has even refunded the taxes that the system has mistakenly collected to the seller. However, I noticed that this platform does not have services like FBA, and sellers can only use overseas warehouses and self-delivery.

Amazon mentioned in the tax email notification that the tax number needs to be uploaded in the following two situations.

Simply put, in addition to local taxpayers having to upload their tax numbers and pay taxes, there are also tax obligations when shipping goods using warehouses in Mexico.

Therefore, the sellers who are really not affected are the self-delivery sellers in Mexico, who do not have to pay VAT when shipping from abroad. This situation is quite similar to that in Europe, where sellers who use local FBA services need to register for a local tax number and pay taxes.

The Mexican site instantly lost its competitiveness. If you need a tax number, you might as well go to the European site. Whether it is local services or market size, the European site is better. Moreover, the European site is welcoming a big opportunity for cross-border sellers recently - resumption of work!

Compared to the United States, which is still under lockdown and riots, Europe has now passed the outbreak period, and countries are opening restrictions and resuming work and life. Especially since the recent resumption of work, the demand for bicycles, scooters, and home furniture has exploded.

Compared with the same period last year, bicycle sales in the Spanish market increased by more than 22 times in May! Italy and the UK increased by about 4 times; sales of electric scooters also increased significantly, among which Italy increased by nearly 900%, the UK increased by nearly 800%, France increased by 380%, and Spain increased by 280%!

In order to stimulate purchases and the economy, European governments and Amazon have introduced various preferential policies. For example, Amazon Europe has introduced sales commission discounts for categories such as clothing and shoes, and has also reduced the commission for some categories from 15% to 7% until April 30 next year...

Currently, the only concern for sellers who want to set up a European site is actually VAT tax. We have previously contacted a super cheap self-reporting tax platform - Kuashuiyun . The price is so cheap that our students couldn't believe it was a formal platform. In fact, Kuashuiyun VAT is an officially certified platform by the British and German tax authorities, and there is no problem with security at all.

In order to help more sellers dispel their doubts and try this cheap and fast self-declaration method, they specially launched the European VAT 0 yuan tax declaration experience event, and the "ten items" of services are completely free! !

Now VAT of the five countries including the UK, France, Germany, Italy and Spain can be applied directly online. Sellers can upload relevant information on the platform to apply for a tax number, calculate and file taxes by themselves, and can choose whether to renew after the event ends.