16/01/2018
German tax authorities deliver a blow to Chinese Amazon sellers
German tax authorities have dealt a severe blow to the Chinese sellers operating in Germany via Amazon. Namely, the majority of these retailers constantly and repeatedly refused to register and pay VAT, and after several warnings, the German state lost its temper and went to react in a pretty harsh and ultimately decisive manner.
All the retailers operating via Amazon Germany that are suspected to not being registered in the country and not paying VAT will get their assets seized until they complete the necessary steps and start selling under the terms enforced by the state. This does not apply only on the funds currently being on the accounts, but also to the merchandise in the Amazon FBA.
Amazon has notified all Chinese retailers that are affected by this issue, and their reaction was as expected – a total outrage!
This comes as no wonder since the amount of assets seized counts in millions of euros. Still, the Amazon has to submit to the letter of the law and there is no chance that those assets will be released until all obligations towards the tax authorities have been settled.
Many people in the UK see this as a positive move as the same problem is quite noticeable here as well, yet the state response is far from being decisive.
This move could have some further implications as the Chinese sellers do have a significant portion of the Amazon Germany market, but it is not likely that they will be abandoning it due to the issues that occurred thanks to this latest move by the tax authorities. In any case, it will be interesting to see what comes next, and how other countries affected by the same problem will respond after the German precedent.