Amazon provides a marketplace tax collection service in some regions, which allows it to collect sales tax and VAT and submit it to the appropriate authorities on behalf of the seller.
Which orders are affected
If Amazon tells Brightpearl it is a Marketplace Facilitator for taxes when pushing the order through, Brightpearl will withhold the taxes.
You can learn more about which specific orders and regions are affected on Amazon's help pages - for example:
- Amazon's page on the Marketplace Tax Collection service
- Amazon's page on the UK and EU VAT legislation
How Brightpearl handles withheld tax
Since the money Amazon collects for the tax never reaches the seller's bank, it should not be accounted for.
When Amazon withholds taxes, the tax amount is set to 0.00 on the order. Instead, the orders will download without a tax amount. They will be marked as fully paid and will not require any action to account for the withheld tax.
Brightpearl only does this when Amazon tells us in the order data that they withheld taxes, as Brightpearl does not have the required information to guess this important information.
Important: Amazon has a defect in the SP-API for orders where certain cross-border shipping scenarios have withheld tax shown in Amazon Seller Central, but this information isn’t sent via the order API. We are working with them to understand timelines to fix or if workarounds are possible.
In more detail:
- The order is placed on Amazon.
- Brightpearl downloads the order, checking whether Amazon has collected the tax on the seller's behalf. If Amazon has collected the tax, the tax amount will be excluded from the order.
- When the payment for an order containing withheld tax downloads, the tax amount will not be included in the payment amount.
- This means the order total will match the total payment, and neither figure will include withheld tax.
- You will only account for the money that you actually receive.
Note: If you need to report on the withheld tax, you can see the information directly in Seller Central.