Enjoying paying the Digital Services Tax? - Amazon must be liking their newfound advantage and the investment earnings
So little talk, but this is a big deal. Since October 1st, Amazon has been charging you a 3% fee on the 'marketplace' fees they charge you. Check out your reports. This is because the Canadian government enacted the Digital Services Tax but Amazon decided to pass it on to sellers as a Digital Services Fee.
Original threads regarding this seem to have been locked (and can't be posted here as it says they are not internal to Amazon - huh?)
Some points:
1 - Amazon does not have to remit until June 30, 2025 yet they have been collecting from us since Oct. That's a lot of extra cash they get to invest.
2 - Amazon's own sales are not subject to the fee. Meaning Amazon has an advantage over third party sellers when they compete on the same or similar product.
3 - US Sellers are only charged 2%, so Canadian businesses pay more at 3%.
4 - All other marketplaces (eBay, Walmart, Facebook) have so far absorbed the fee. Only Amazon and Google Ads are currently passing on the fee (Google Ads is at 2.5%)
Enjoying paying the Digital Services Tax? - Amazon must be liking their newfound advantage and the investment earnings
So little talk, but this is a big deal. Since October 1st, Amazon has been charging you a 3% fee on the 'marketplace' fees they charge you. Check out your reports. This is because the Canadian government enacted the Digital Services Tax but Amazon decided to pass it on to sellers as a Digital Services Fee.
Original threads regarding this seem to have been locked (and can't be posted here as it says they are not internal to Amazon - huh?)
Some points:
1 - Amazon does not have to remit until June 30, 2025 yet they have been collecting from us since Oct. That's a lot of extra cash they get to invest.
2 - Amazon's own sales are not subject to the fee. Meaning Amazon has an advantage over third party sellers when they compete on the same or similar product.
3 - US Sellers are only charged 2%, so Canadian businesses pay more at 3%.
4 - All other marketplaces (eBay, Walmart, Facebook) have so far absorbed the fee. Only Amazon and Google Ads are currently passing on the fee (Google Ads is at 2.5%)
8 replies
Jurgen_Amazon
Hello @Seller_BCsJXNkuO7q9e,
Thank you for bringing up this important topic regarding the Digital Services Tax (DST) and its implementation. We understand your concerns and appreciate the opportunity to address them.
- Timing of fee collection and remittance: The October 1, 2024 implementation date for the Digital Services Fee was set to align with the Canadian government's DST legislation. While the remittance to the government is scheduled for June 2025, this timing is in accordance with the law. Amazon, like other businesses, must prepare for this significant tax obligation.
- Impact on competition: We strive to maintain a level playing field for all sellers. The DST applies to digital services provided by Amazon, which includes our third-party marketplace services. Our own retail business operates under a different model and is subject to other applicable taxes.
- Fee differences between Canadian and US sellers: The difference in rates (3% for Canadian businesses, 2% for US businesses selling in Canada) reflects the complex nature of international digital taxation. These rates are designed to account for various factors, including bilateral tax agreements.
- Amazon's approach compared to other platforms: Each company must make its own decisions on how to manage new tax obligations. Our approach aims to create transparency and predictability for sellers, allowing you to plan your business accordingly.
We encourage you to review the detailed information provided in the Digital Services Fee help page for a comprehensive understanding of how this fee applies to your business. Also, you can review the forum Digital services fee effective October 1, posted 4 months ago.
We understand that additional costs can be challenging. Furthermore, we remain committed to providing a robust marketplace for sellers and continuously invest in tools and services to help you grow your business on Amazon.
If you have specific questions about how this fee affects your account, please don't hesitate to contact Seller Support for personalized assistance.
We value the insights and experiences of our seller community. Your feedback is crucial in helping us understand the real-world impact of these changes. We encourage you to continue sharing your thoughts and experiences regarding the Digital Services Fee in this forum.
Community, to foster a productive discussion:
- Have you noticed any significant changes in your business operations since the implementation of this fee?
- Are there specific aspects of the fee structure that you find particularly challenging?
- What additional information or resources would be helpful for you in navigating this change?
We're committed to supporting our sellers through this transition. By sharing your experiences and suggestions, you not only help fellow sellers but also provide valuable input that can inform our ongoing efforts to improve the selling experience on Amazon.
Let's keep this conversation going. Your voice matters in shaping the future of selling on Amazon Canada.
Thank you for your continued partnership.
Jurgen
