The tax system in the United States is very complicated. In addition to federal taxes, there are 50 states in the United States. Each state has a different tax system. If Chinese cross-border e-commerce sellers sell goods to American buyers through websites or e-commerce platforms, then , let’s learn about the tax policies for cross-border e-commerce in the United States? How to declare?
1. What are the U.S. cross-border e-commerce tax policies?
According to U.S. tax laws, Chinese cross-border e-commerce sellers need to pay two types of taxes. The first is income tax and the second is sales tax. If a Chinese cross-border e-commerce seller sells on the website in the name of a Chinese company, according to U.S. federal tax laws, the non-U.S. tax resident enterprise’s trading and operating activities in the United States have income that is actually connected.
2. Under what circumstances do sellers need to declare sales tax in the United States?
Whether Chinese cross-border e-commerce sellers need to declare sales tax in the United States mainly depends on whether it is generated in the United States. business activities. Sales tax association is Sales tax
nexus. If the seller has an office or store in a certain state in the United States, or employs sales personnel, contractors, etc., or has a warehouse in a certain state in the United States, such as Amazon’s FBA warehouse or other third-party overseas warehouse, the business in this case The activity creates a sales tax nexus.
In addition, sales tax-related business activities will also occur when the seller’s sales reach a certain limit or the number of transactions exceeds a certain limit. E-commerce sellers with sales tax in the United States need to collect sales tax from buyers in the corresponding state, and then pay it to the state government through sales tax declaration.
3. What are the differences in tax obligations between Amazon and independent sellers?
In the United States, platforms that provide cross-border sales for e-commerce sellers are considered online marketplaces, such as Amazon, Walmart and eBay etc. Some states in the United States have successively introduced policies requiring online marketplaces to be responsible for collecting sales tax from buyers. That’s why Amazon helps sellers withhold sales tax. But so far, not all states in the United States have implemented platform withholding and payment. There are 50 states and 1 special administrative region in the United States, five of which are exempt from sales tax. For states where Amazon has not yet implemented sales tax withholding and payment, sellers need to apply for a sales tax number and declare sales tax on their own. Compared with e-commerce sellers selling on the Amazon platform, independent sellers need to fulfill US tax law regulations on their own, including applying for a sales tax number and reporting sales tax in the state where sales tax is generated, and paying sales tax to the local government.
4. What is the difference between U.S. sales tax and European VAT?
Independent sellers are also subject to the same income tax obligations as platform sellers, including U.S. federal income tax and local state income tax. At the same time, although the US sales tax and the EU value-added tax (VAT) are both taxes paid by the final consumer, their taxation models on e-commerce platforms are different. In the United States, the seller’s sales price on the website does not include tax. The platform will add the corresponding sales tax based on different tax rates in the state and pay it by the buyer. The seller will receive the price of the originally priced product. In the EU, the platform defaults to a seller’s price including tax. If the seller does not include VAT in the cost, the platform will withhold and pay the product and directly deduct the VAT from the product’s sales. The seller will have already deducted the VAT when receiving the payment. Approximately 20% VAT. Therefore, the two tax collection methods determine the difference in product pricing models for sellers.
The above introduces the relevant knowledge about the US cross-border e-commerce tax policy. Due to the complexity of US taxation, many sellers have only a little knowledge. However, with the advancement of global tax compliance, the United States has gradually increased its tax regulations for cross-border sellers. From the overall development trend of the entire cross-border e-commerce industry, there is a new development trend of dual-line integrated development, live streaming of goods, and social communication. This is also closely related to the current scientific and technological development and industry situation. joint.