Amazon Introduces New Digital Service Fees for International Sellers

Amazon's US platform recently announced that starting from October 1, 2024, sellers will be subject to a digital service fee to offset the Digital Services Taxes (DST) imposed by governments in countries such as Canada, the United Kingdom, and France.

The announcement specifies that since amazon DST fees vary based on multiple factors, Amazon will only charge a fixed digital service fee based on the seller's business location and the sales destination. This fee will not apply to sellers with businesses established in the United States and selling within the US. However, sellers whose businesses are based in countries that have implemented DST (such as the UK, France, Italy, Spain, and Canada) will also need to pay this fee when selling in the US.

The fee rates and applicable scope will differ based on the country where the business is established. For example:

• A business established in Canada selling a $15 item in the US marketplace will be charged a 3% digital service fee (amounting to $0.07) on the Amazon selling fee ($2.25) starting October 1.
• A business established in the UK selling a $15 item in the US marketplace will be charged a 2% digital service fee (amounting to $0.05) on the Amazon selling fee ($2.25) and a 2% digital service fee (amounting to $0.07) on the FBA fee ($3.30) starting October 1.

To better understand how this fee will impact their business, sellers can visit the "Digital Service Fees" page to review the rates and examples for various countries.

Starting from September 1, sellers can preview this fee in the revenue calculator. From October 1 onwards, sellers will be able to track the digital service fees through the transaction view in the payment report. If sellers use FBA logistics, the digital service fee will be included in Amazon's free automated pricing tool from October 1.

Below is a screenshot of the Amazon announcement:

In summary, the new Amazon Digital Service Fee aims to offset the impact of international digital services taxes on sellers. As this fee takes effect on October 1, 2024, it is crucial for international sellers to review the specific rates and prepare accordingly to ensure seamless business operations on the Amazon platform.