Does Amazon need to pay taxes when opening a store? How to file taxes when opening a store on Amazon

763305893@qq.com
3 min readOct 15, 2021

Taxes are unavoidable in any industry. So, does Amazon have to pay taxes when opening a store?

1. Do I have to pay taxes?

Of course, there is a tax. Amazon needs to pay the following taxes to open a store:

1. Sales tax

Known as “sales tax”, this is a simple one-time tax collected at the time of purchase. The money goes from the consumer to the seller to the government: eventually. This form of sales tax exists throughout the United States and is determined by the state and locality. (In the United States, there is no comprehensive national sales tax.)

Since states and local jurisdictions can determine their various rules, business taxes in the United States are very complicated.

2. Value-added tax

Value-added tax (VAT) is a type of consumption tax levied at every stage of production. At each stage, the value of the goods or services will increase. This increase, or “value added”, is taxable. The great thing is that as a business owner, you can refund any value added tax paid in the production chain. Only the final consumer can pay for it out of pocket.

Generally, the way VAT works is this: You pay a certain amount of VAT to other companies that help you make your products. These small amounts of value added tax are called “input taxes”, and you will get the amount of each input tax.

Every transaction you make on Amazon will add the appropriate VAT rate to the transaction. The customer pays you taxes.

At the end of the season, once you have collected value-added tax (“output tax”) from all customers, you are ready to send the value-added tax to the government. But first, you can deduct all input taxes from the total so that the money can be spent in your pocket.

3. Goods and Services Tax

Goods and Services Tax (GST) is also levied at every step of the supply chain. However, unlike value-added tax, no matter what value is added, GST is charged. It is usually just a fixed percentage of the transaction.

Generally, the way GST works is like this: at each stage of the manufacturing process, the company is charged, and the end customer is charged at the point of sale. Then, GST will be refunded to everyone (except end users) through tax credits.

2. How to file a tax return?

Most countries use store information and company information to register a VAT tax number to declare taxes. A small number of countries implement a tax representative system and require sellers to find a local country’s qualified accounting firm as the seller’s tax representative. Docking with the tax bureau to file tax returns.

In addition, most places provide online tax registration. Sellers can apply for a tax number by themselves and file their own tax declarations through the online portal website. However, it should be noted that taxation is of a certain professional nature. If the seller makes mistakes during the tax declaration and payment period , May lead to tax non-compliance.

Amazon is also required to pay taxes when opening a store, and there are many types of taxes to be paid. Merchants must prepare reports and pay taxes in accordance with the law. This is the basic obligation of Chinese citizens. However, the amount of tax paid is also linked to our turnover. You should learn this in advance.

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