Does Amazon US FBA Require Tax Payment? When Does Cross-Border E-commerce Need to Pay Taxes?

Amazon FBA Fulfillment by Amazon is a warehousing and logistics service provided by Amazon, which many cross-border e-commerce sellers choose to use in order to improve operational efficiency and customer satisfaction. However, for cross-border e-commerce businesses, tax issues are an important aspect that cannot be ignored. So, does Amazon US FBA require taxation? Under what circumstances do cross-border e-commerce businesses need to pay taxes?

Firstly, it's essential to clarify that wherever business activities take place across borders, they may need to comply with local tax laws. Using Amazon FBA means storing products in Amazon warehouses in the U.S. and completing orders through Amazon's platform. In this case, sellers have effectively entered the U.S. market, thus requiring them to pay relevant taxes on their income.

According to U.S. tax law, if a foreign company conducts business in the U.S. via Amazon FBA, even without a physical presence, it may be considered to have a permanent establishment within the U.S. Once such a status is recognized, the enterprise must declare and pay income tax according to U.S. tax law. Specifically, the federal corporate income tax rate in the U.S. is 21%, and additional state-level corporate income taxes may also apply. Cross-border e-commerce sellers using Amazon FBA must take their tax compliance seriously.

It should be noted that U.S. tax law handles different types of income differently. For instance, if a cross-border e-commerce business sells products solely through Amazon's platform without using FBA services, its income might be regarded as passive income from a non-resident enterprise, usually subject to a withholding tax of 15%. However, once FBA services are activated, the nature of this passive income may change, leading to higher tax burdens. Sellers need to carefully assess their business models to ensure compliance with relevant regulations.

In addition to federal corporate income tax, cross-border e-commerce businesses also need to consider other types of taxes. For example, if a seller’s annual sales in the U.S. exceed a specific threshold, typically over $10,000, they will need to register and collect sales tax. Sales tax rates vary by state, ranging from zero to over 10%. This means that even if a seller themselves doesn’t need to pay corporate income tax, they still bear the responsibility of collecting sales tax. In some cases, sellers may also need to pay import duties or other fees.

To help cross-border e-commerce businesses better understand and address these complex tax issues, Amazon provides various tools and services. For example, Amazon’s Tax Calculation Service can automatically calculate sales tax and charge buyers accordingly at checkout. Amazon also collaborates with third-party tax advisory firms to provide professional tax planning advice to sellers. Nevertheless, these tools and services cannot fully replace the role of professional accountants or tax advisors. Sellers still need to regularly communicate with professionals to ensure their tax strategies remain compliant with the latest legal requirements.

In recent years, with the development of the digital economy globally and the increased regulatory oversight of cross-border trade, more and more countries are strengthening their management of cross-border e-commerce taxes. For example, the EU has implemented new VAT rules starting from 2025, requiring all merchants selling goods to EU consumers to register and pay VAT in their home country. Although the U.S. has not yet introduced similar unified policies, it can be anticipated that future tax requirements for cross-border e-commerce will become stricter.

In summary, Amazon US FBA indeed requires taxation, especially when sellers conduct substantive business activities through this platform. Before using FBA services, cross-border e-commerce sellers should thoroughly understand and comply with U.S. tax laws, including but not limited to corporate income tax, sales tax, and any other potential taxes. At the same time, sellers need to keep abreast of international tax developments and adjust their business strategies promptly to avoid unnecessary legal risks and economic losses. Only by adhering to legality and compliance can they remain competitive in the fiercely competitive global market.