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.
The digital services fee won’t apply to domestic sales if you’re established in the US and sell in the US store.
If you sell in the US store but your business is established in a country in which DST has been introduced (the UK, France, Italy, Spain, and Canada), the digital services fee will apply to sales made in the US 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 Canada and you sell a $15 item in the US 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 your business is established in the UK and you sell a $15 item in the US store, you’ll be charged a 2% digital services fee ($0.05) on Selling on Amazon fees ($2.25) and a 2% digital services fee ($0.07) on FBA fees ($3.30) for sales starting October 1.
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. If you use Remote Fulfillment with FBA, the digital services fee will be accounted for in our free Automate Pricing tool starting October 1.
