Becoming an International Seller on Amazon: Tax, Compliance, and Fulfillment

To become an international seller on Amazon, key considerations include tax obligations, compliance requirements, and fulfillment options.

Tax:

• If you sell on Amazon marketplaces without a local branch or entity in the target country, your income from sales is generally not taxable in that country because Amazon acts as a facilitator and your business operations are outside the country. For example, selling to customers on Amazon.sg without a Singapore branch means no Singapore tax on that income.
• If you establish a local branch or entity, income earned from sales in that country may be taxable there.
• Double taxation can occur if your home country taxes the same income. This can often be mitigated through double taxation agreements, so consulting a tax professional is recommended.

Compliance:

• You must comply with Amazon’s seller requirements, including identity verification and product restrictions in each marketplace you sell on.
• Products must meet local regulations and Amazon’s policies, including packaging and labelling standards.
• When shipping inventory directly from overseas, you are typically the importer and consignee, responsible for customs clearance and compliance.

Fulfillment:

• Using Amazon FBA (Fulfillment by Amazon) allows sellers to store inventory in Amazon’s fulfillment centers, enabling faster delivery and Prime eligibility.
• You can send inventory to fulfillment centers in the target country without needing a local business entity.
• Consider fees such as monthly seller account fees, FBA fees, referral fees, and potential currency conversion costs if you receive payments in foreign currencies.

In summary, international selling on Amazon involves setting up your seller account, ensuring tax compliance primarily in your home country, adhering to Amazon’s product and shipping policies, and choosing fulfillment methods like FBA to streamline order delivery. Consulting tax and legal professionals is advisable to navigate cross-border tax and compliance complexities effectively.