Incorrect Marketplace Facilitator Tax/Cost
Hello,
Amazon is miscalculating tax on Marketplace Facilitator leading to sellers losing money.
Given I have no faith in seller support to resolve anything as no matter what issue I give them, it never gets solved and just goes in circles, I’m posting here in the hope that someone in Amazon’s accounting or tax departments gets notified of the issue.
We have a A_FOOD_GEN tax code item in UK which is 0% for tax. The product is priced at £10.00.
Marketplace facilitator is designed to ensure that the seller gets the same funds from overseas sales.
However on items like these we are getting significantly less. I’ve worked out why.
Marketplace facilitator is presuming all goods have a 20% tax in UK, therefore with the product in question it is making the item £8.33 ex vat for Marketplace Facilitator to Jersey, then adding on 5% local GST to make £8.75, the difference in which it transmits to the local Jersey tax office.
The result of this is we are being paid proceeds from an £8.33 for a £10 item, meaning we are losing significant money on each sale (we make only 26p on this item at UK price so lose £1.41 for each Channel Island sale).
This is clearly from a bad set up of Marketplace Facilitator which doesn’t take into account the local VAT percentage on tax codes. If the UK product has a A_GEN_TAX/A_GEN_STANDARD vat code the calculations would be correct but it has a zero rated tax code, causing us to lose money.
Amazon need to fix the issue and reimburse sellers, plus a commercial rate of interest, over this.
9 replies
Seller_EHYOwAkoZV3Hb
You’re mistaken there. It is designed for tax authorities to be paid the appropriate amount. Nothing to do with sellers getting paid correctly.
But you are correct, Amazon’s implementation is seriously flawed in many ways, not just as the example you gave. I don’t have a solution.
Most other marketplaces, if not all, do it correctly.
Seller_7VbclcPFFRTnc
this has been ongoing for years
most sellers have switched off Jersey - well as of July 1st - those who know about the changes there
and others have switched off EU too because of it
Seller_FQHkqHJI5SqTh
It’s the same with books which are zero rated too.
I no longer sell into the EU and now Channel Islands through Amazon, but do on every other site I sell through as they all seem to have been able to implement this correctly.
Seller_qZO3ZCjoBXEeL
Check the category your product is in - Marketplace Facilitator Tax ignores product tax codes and calculates tax based on the category of the product listing I believe.
Seller_tRuvBEHDedp4q
Marketplace facilitator is presuming all goods have a 20% tax in UK, therefore with the product in question it is making the item £8.33 ex vat
Its actually worse than that on EU orders as Amazon use the VAT rate of the country the item is destined to - not the UK rate at all.
So something advertised on UK site at £10, if being sent to Ireland with a 23% VAT rate, the seller will be get £8.13 not £8.33 !
