Do Amazon China stores need to pay taxes? What taxes should be paid?

Whether you want to open a store on Taobao or do cross-border business, what everyone is most concerned about is the store opening fees, the required costs and taxes. So do Amazon China stores have to pay taxes?

If Amazon in foreign countries does not need to pay taxes, it is because it is in foreign countries and has nothing to do with China. Domestic ones must pay taxes, just like opening a store in China.

What taxes should be paid?

1. Sales Tax

Known as a "sales tax," it's a simple one-time tax collected at the time of a purchase. The money goes from the consumer to the seller, and then to the government: ultimately. This form of sales tax exists across the United States, determined by state and local governments. (In the United States, there is no across-the-board national sales tax.)

Sales tax in the United States is very complex because each state and local jurisdiction can decide their own various rules.

2. Value Added Tax

Value Added Tax (VAT) is a type of consumption tax that is levied at every stage of production. At each stage, the value of the good or service is increased. This increase, the "value added", is taxed. The great thing is that as a business owner, you can reclaim any VAT you paid in the production chain. Only the final consumer has to pay out of pocket.

Typically, VAT works like this: You pay a small amount of VAT to other businesses that help you make your products. These small amounts of VAT are called "input tax," and you get credit for each input tax you pay.

Every sale you make on Amazon has the appropriate VAT rate added to the transaction. The customer pays the tax to you.

At the end of the season, once you've collected VAT from all your customers ("output tax"), you're ready to send the VAT to the government. But first, you deduct any input tax from the total so the money is in your pocket.

3. Goods and Services Tax

Goods and Services Tax (GST) is also levied at each step of the supply chain. However, unlike VAT, GST is charged regardless of the value added. It is usually just a fixed percentage of the transaction.

Typically, the way GST works is this: businesses are charged at every stage of the manufacturing process and the end customer at the point of sale. The GST is then refunded to everyone (except the end user) through tax credits.

Generally speaking, Amazon China stores need to pay taxes. If they are overseas, then they do not need to pay taxes because it has nothing to do with the domestic situation.