Digital services fee effective October 1
The Canadian government recently implemented a digital services tax (DST), similar to those of the UK, France, Italy, and Spain. On October 1, 2024, we’ll introduce a digital services fee to account for DST.
While the typical DST rate is 2% in the UK and 3% in Canada, France, Italy, and Spain, DST charges are unpredictable as they vary based on the location of your business, the location of the buyer, and other factors. Rather than base the digital services fee on these location variables, which would create an unpredictable business impact because you can’t know the location of customers who will buy your products, we’ll introduce a fixed digital services fee based only on your location and the store in which you sell.
If your business is established in Canada, the digital services fee will apply as a percentage increase to your Selling on Amazon fees starting October 1, 2024. The fee rate will vary based on the stores in which you sell.
- For example, if your business is established in Canada and you sell a $15 item in the Canada store, you’ll be charged a 3% digital services fee ($0.07) on Selling on Amazon fees ($2.25) for sales starting October 1.
If you sell in the Canada store but your business is established elsewhere, such as the US, the digital services fee will apply to sales made in the Canada store. The fee rate and what it applies to will vary based on the country in which your business is established.
- For example, if your business is established in the US and you sell a $15 item in the Canada store, you’ll be charged a 2% digital services fee ($0.05) on Selling on Amazon fees ($2.25) for sales starting October 1. If your business is established in the US and you sell a $15 item in the US store, the digital services fee will not apply.
To better help you understand how this fee will affect your business, including rates by country and examples, go to Digital services fee.
Starting September 1, you’ll be able to preview the fee in the Revenue Calculator, and from October 1 you can track your digital services fees via the Transaction View in your Payments reports.
14 replies
Seller_BCsJXNkuO7q9e
So, unsurprisingly, Amazon decided to pass on the full cost of the DST to sellers.
USA sellers who sell in Canada are charged 2% extra on seller fees, yet Canadian based sellers 3%? Why? As the government set rate seems to be 3% for all per the law. Is Amazon using this as a tool to punish the Canadian government for this tax?
This law was intended to make large foreign 'digital' companies contribute to Canadian revenues, but with Amazon fully passing it on to sellers, it means all Canadian businesses (of any size) just saw a cost increase.
Sellers will raise prices and buyers will pay more. Well done Canada! This is a bone-headed policy.
Amazon will win, of course, because they do not pay themselves seller fees (the tax only applies on digital services which is the referral fee in this case) so the cost to sell their own products have not gone up.
Seller_BCsJXNkuO7q9e
Just so we're clear, this means your referral fee is going up across the board.
The post above by Amazon seems designed to drown the tone in technical bits (all about depending on which country, etc.) rather than simply saying the truth: YOUR FEES ARE GOING UP.
What does this actually mean? If you are typically charged a 15% referral fee, you will now be charged a 15.45% referral fee.
You cannot claim this extra fee back from the government as, from their perspective, it is simply a fee charged by Amazon, not a tax.
If you want to maintain the same margins as before this tax, you will need to increase your price on Amazon by about 0.45%.
This is a heavily politicized issue, and the US government may retaliate against Canada for taking this unilateral position on the DST. Google has also announced they are passing the fees on to the consumer. Undoubtedly, other companies will follow.
It's not impossible that something about this will change over the coming months.
But from our perspective as sellers, this is a tax by the Canadian government that Amazon decided to pass on to us, which means we are passing it on to the end-user.
Seller_WqEAe5Q0XCJLH
According to the Canadian government:
"The DST would apply at a rate of 3 per cent on certain revenue earned by large businesses from certain digital services reliant on the engagement, data and content contributions of Canadian users, as well as on certain sales or licensing of Canadian user data."
As a small business, I should not have the tax passed onto me by the large business.
Seller_xJx7vH6fvZFD9
@Lucre_Amzn
@Ricardo_Amazon
Anyone has feedback regarding this? Why is Amazon making sellers pay for this as a cost increase?
If we understand correctly, sellers have to pay 3% more on referral fees (from 15% to 15,45%) AND also pay more taxes just because Amazon doesn't want to be affected by THEIR OWN TAX OBLIGATION?
Why try to justify it with taxes? The tax obligation is for AMAZON not for the sellers. The reason for the cost increase is irrelevant, the result for us is the same.
The bottom line is : referral fee is going from 15 to 15,45% and sellers can expect 0,45% profit decrease.
Digital services fee effective October 1
The Canadian government recently implemented a digital services tax (DST), similar to those of the UK, France, Italy, and Spain. On October 1, 2024, we’ll introduce a digital services fee to account for DST.
While the typical DST rate is 2% in the UK and 3% in Canada, France, Italy, and Spain, DST charges are unpredictable as they vary based on the location of your business, the location of the buyer, and other factors. Rather than base the digital services fee on these location variables, which would create an unpredictable business impact because you can’t know the location of customers who will buy your products, we’ll introduce a fixed digital services fee based only on your location and the store in which you sell.
If your business is established in Canada, the digital services fee will apply as a percentage increase to your Selling on Amazon fees starting October 1, 2024. The fee rate will vary based on the stores in which you sell.
- For example, if your business is established in Canada and you sell a $15 item in the Canada store, you’ll be charged a 3% digital services fee ($0.07) on Selling on Amazon fees ($2.25) for sales starting October 1.
If you sell in the Canada store but your business is established elsewhere, such as the US, the digital services fee will apply to sales made in the Canada store. The fee rate and what it applies to will vary based on the country in which your business is established.
- For example, if your business is established in the US and you sell a $15 item in the Canada store, you’ll be charged a 2% digital services fee ($0.05) on Selling on Amazon fees ($2.25) for sales starting October 1. If your business is established in the US and you sell a $15 item in the US store, the digital services fee will not apply.
To better help you understand how this fee will affect your business, including rates by country and examples, go to Digital services fee.
Starting September 1, you’ll be able to preview the fee in the Revenue Calculator, and from October 1 you can track your digital services fees via the Transaction View in your Payments reports.
Digital services fee effective October 1
The Canadian government recently implemented a digital services tax (DST), similar to those of the UK, France, Italy, and Spain. On October 1, 2024, we’ll introduce a digital services fee to account for DST.
While the typical DST rate is 2% in the UK and 3% in Canada, France, Italy, and Spain, DST charges are unpredictable as they vary based on the location of your business, the location of the buyer, and other factors. Rather than base the digital services fee on these location variables, which would create an unpredictable business impact because you can’t know the location of customers who will buy your products, we’ll introduce a fixed digital services fee based only on your location and the store in which you sell.
If your business is established in Canada, the digital services fee will apply as a percentage increase to your Selling on Amazon fees starting October 1, 2024. The fee rate will vary based on the stores in which you sell.
- For example, if your business is established in Canada and you sell a $15 item in the Canada store, you’ll be charged a 3% digital services fee ($0.07) on Selling on Amazon fees ($2.25) for sales starting October 1.
If you sell in the Canada store but your business is established elsewhere, such as the US, the digital services fee will apply to sales made in the Canada store. The fee rate and what it applies to will vary based on the country in which your business is established.
- For example, if your business is established in the US and you sell a $15 item in the Canada store, you’ll be charged a 2% digital services fee ($0.05) on Selling on Amazon fees ($2.25) for sales starting October 1. If your business is established in the US and you sell a $15 item in the US store, the digital services fee will not apply.
To better help you understand how this fee will affect your business, including rates by country and examples, go to Digital services fee.
Starting September 1, you’ll be able to preview the fee in the Revenue Calculator, and from October 1 you can track your digital services fees via the Transaction View in your Payments reports.
14 replies
14 replies
Seller_BCsJXNkuO7q9e
So, unsurprisingly, Amazon decided to pass on the full cost of the DST to sellers.
USA sellers who sell in Canada are charged 2% extra on seller fees, yet Canadian based sellers 3%? Why? As the government set rate seems to be 3% for all per the law. Is Amazon using this as a tool to punish the Canadian government for this tax?
This law was intended to make large foreign 'digital' companies contribute to Canadian revenues, but with Amazon fully passing it on to sellers, it means all Canadian businesses (of any size) just saw a cost increase.
Sellers will raise prices and buyers will pay more. Well done Canada! This is a bone-headed policy.
Amazon will win, of course, because they do not pay themselves seller fees (the tax only applies on digital services which is the referral fee in this case) so the cost to sell their own products have not gone up.
Seller_BCsJXNkuO7q9e
Just so we're clear, this means your referral fee is going up across the board.
The post above by Amazon seems designed to drown the tone in technical bits (all about depending on which country, etc.) rather than simply saying the truth: YOUR FEES ARE GOING UP.
What does this actually mean? If you are typically charged a 15% referral fee, you will now be charged a 15.45% referral fee.
You cannot claim this extra fee back from the government as, from their perspective, it is simply a fee charged by Amazon, not a tax.
If you want to maintain the same margins as before this tax, you will need to increase your price on Amazon by about 0.45%.
This is a heavily politicized issue, and the US government may retaliate against Canada for taking this unilateral position on the DST. Google has also announced they are passing the fees on to the consumer. Undoubtedly, other companies will follow.
It's not impossible that something about this will change over the coming months.
But from our perspective as sellers, this is a tax by the Canadian government that Amazon decided to pass on to us, which means we are passing it on to the end-user.
Seller_WqEAe5Q0XCJLH
According to the Canadian government:
"The DST would apply at a rate of 3 per cent on certain revenue earned by large businesses from certain digital services reliant on the engagement, data and content contributions of Canadian users, as well as on certain sales or licensing of Canadian user data."
As a small business, I should not have the tax passed onto me by the large business.
Seller_xJx7vH6fvZFD9
@Lucre_Amzn
@Ricardo_Amazon
Anyone has feedback regarding this? Why is Amazon making sellers pay for this as a cost increase?
If we understand correctly, sellers have to pay 3% more on referral fees (from 15% to 15,45%) AND also pay more taxes just because Amazon doesn't want to be affected by THEIR OWN TAX OBLIGATION?
Why try to justify it with taxes? The tax obligation is for AMAZON not for the sellers. The reason for the cost increase is irrelevant, the result for us is the same.
The bottom line is : referral fee is going from 15 to 15,45% and sellers can expect 0,45% profit decrease.
Seller_BCsJXNkuO7q9e
So, unsurprisingly, Amazon decided to pass on the full cost of the DST to sellers.
USA sellers who sell in Canada are charged 2% extra on seller fees, yet Canadian based sellers 3%? Why? As the government set rate seems to be 3% for all per the law. Is Amazon using this as a tool to punish the Canadian government for this tax?
This law was intended to make large foreign 'digital' companies contribute to Canadian revenues, but with Amazon fully passing it on to sellers, it means all Canadian businesses (of any size) just saw a cost increase.
Sellers will raise prices and buyers will pay more. Well done Canada! This is a bone-headed policy.
Amazon will win, of course, because they do not pay themselves seller fees (the tax only applies on digital services which is the referral fee in this case) so the cost to sell their own products have not gone up.
Seller_BCsJXNkuO7q9e
So, unsurprisingly, Amazon decided to pass on the full cost of the DST to sellers.
USA sellers who sell in Canada are charged 2% extra on seller fees, yet Canadian based sellers 3%? Why? As the government set rate seems to be 3% for all per the law. Is Amazon using this as a tool to punish the Canadian government for this tax?
This law was intended to make large foreign 'digital' companies contribute to Canadian revenues, but with Amazon fully passing it on to sellers, it means all Canadian businesses (of any size) just saw a cost increase.
Sellers will raise prices and buyers will pay more. Well done Canada! This is a bone-headed policy.
Amazon will win, of course, because they do not pay themselves seller fees (the tax only applies on digital services which is the referral fee in this case) so the cost to sell their own products have not gone up.
Seller_BCsJXNkuO7q9e
Just so we're clear, this means your referral fee is going up across the board.
The post above by Amazon seems designed to drown the tone in technical bits (all about depending on which country, etc.) rather than simply saying the truth: YOUR FEES ARE GOING UP.
What does this actually mean? If you are typically charged a 15% referral fee, you will now be charged a 15.45% referral fee.
You cannot claim this extra fee back from the government as, from their perspective, it is simply a fee charged by Amazon, not a tax.
If you want to maintain the same margins as before this tax, you will need to increase your price on Amazon by about 0.45%.
This is a heavily politicized issue, and the US government may retaliate against Canada for taking this unilateral position on the DST. Google has also announced they are passing the fees on to the consumer. Undoubtedly, other companies will follow.
It's not impossible that something about this will change over the coming months.
But from our perspective as sellers, this is a tax by the Canadian government that Amazon decided to pass on to us, which means we are passing it on to the end-user.
Seller_BCsJXNkuO7q9e
Just so we're clear, this means your referral fee is going up across the board.
The post above by Amazon seems designed to drown the tone in technical bits (all about depending on which country, etc.) rather than simply saying the truth: YOUR FEES ARE GOING UP.
What does this actually mean? If you are typically charged a 15% referral fee, you will now be charged a 15.45% referral fee.
You cannot claim this extra fee back from the government as, from their perspective, it is simply a fee charged by Amazon, not a tax.
If you want to maintain the same margins as before this tax, you will need to increase your price on Amazon by about 0.45%.
This is a heavily politicized issue, and the US government may retaliate against Canada for taking this unilateral position on the DST. Google has also announced they are passing the fees on to the consumer. Undoubtedly, other companies will follow.
It's not impossible that something about this will change over the coming months.
But from our perspective as sellers, this is a tax by the Canadian government that Amazon decided to pass on to us, which means we are passing it on to the end-user.
Seller_WqEAe5Q0XCJLH
According to the Canadian government:
"The DST would apply at a rate of 3 per cent on certain revenue earned by large businesses from certain digital services reliant on the engagement, data and content contributions of Canadian users, as well as on certain sales or licensing of Canadian user data."
As a small business, I should not have the tax passed onto me by the large business.
Seller_WqEAe5Q0XCJLH
According to the Canadian government:
"The DST would apply at a rate of 3 per cent on certain revenue earned by large businesses from certain digital services reliant on the engagement, data and content contributions of Canadian users, as well as on certain sales or licensing of Canadian user data."
As a small business, I should not have the tax passed onto me by the large business.
Seller_xJx7vH6fvZFD9
@Lucre_Amzn
@Ricardo_Amazon
Anyone has feedback regarding this? Why is Amazon making sellers pay for this as a cost increase?
If we understand correctly, sellers have to pay 3% more on referral fees (from 15% to 15,45%) AND also pay more taxes just because Amazon doesn't want to be affected by THEIR OWN TAX OBLIGATION?
Why try to justify it with taxes? The tax obligation is for AMAZON not for the sellers. The reason for the cost increase is irrelevant, the result for us is the same.
The bottom line is : referral fee is going from 15 to 15,45% and sellers can expect 0,45% profit decrease.
Seller_xJx7vH6fvZFD9
@Lucre_Amzn
@Ricardo_Amazon
Anyone has feedback regarding this? Why is Amazon making sellers pay for this as a cost increase?
If we understand correctly, sellers have to pay 3% more on referral fees (from 15% to 15,45%) AND also pay more taxes just because Amazon doesn't want to be affected by THEIR OWN TAX OBLIGATION?
Why try to justify it with taxes? The tax obligation is for AMAZON not for the sellers. The reason for the cost increase is irrelevant, the result for us is the same.
The bottom line is : referral fee is going from 15 to 15,45% and sellers can expect 0,45% profit decrease.
