For novice sellers, in addition to understanding Amazon’s tax rules, the most important thing is to understand China’s tax system and legal system to ensure smooth import and export of goods. So how do Amazon merchants pay taxes in China? First of all, cross-border e-commerce merchants must pay taxes to the Chinese tax bureau and customs departments, especially import duties and value-added tax.
The following will focus on explaining import value-added duties and value-added tax. These two taxes are also easily confused by many novice Amazon sellers.
1. Import value-added tax.
The so-called import value-added tax refers to the value-added tax collected by the customs during the customs declaration process after Amazon sellers import goods. It is essentially a circulation tax. Different from the value-added tax that ordinary consumers understand, the value-added tax collected in domestic production activities, wholesale activities, and retail activities is payable on products, not general value-added tax.
The real import VAT is levied on cross-border e-commerce import and export sellers, and it is a special VAT among the tax categories in our country.
How do Amazon merchants pay taxes in China? This import value-added tax is the first tax they need to pay, and if the product pays the import value-added tax normally, the value-added tax that may be incurred can be reduced or reduced through special tax policies.
2. Value-added tax (GST).
This value-added tax is the general value-added tax mentioned above. It is a general tax in our country’s tax system and is also the most familiar form of value-added tax to the general public. VAT is the tax payable upon sale of goods. Different from import VAT, general VAT is a taxable product. It is the added value of the product during the circulation process. The government charges a certain tax on this part of the added value. This is the essence of VAT.
In short, how do Amazon merchants pay taxes in China? Value-added tax is a tax that all cross-border e-commerce sellers must pay. Value-added tax is also divided into general value-added tax and special value-added tax. Cross-border e-commerce sellers must understand the difference between the two. General VAT is generated during the circulation of goods, while special VAT is borne by the seller and can be reduced or reduced through special policies.