AWS Marketplace- Tax Help for Sellers

  • AWS Marketplace is operated globally by different AWS legal entities based on the location of the buyer’s AWS account, or by the classification of your product listing as Professional Services.

    Amazon Web Services, Inc. ("AWS, Inc."), a U.S. based entity, is the Marketplace Operator of AWS Marketplace sales to AWS buyer accounts not located in EMEA (except Turkey and South Africa), Australia, or Japan.

    • From January 1, 2022, if you have onboarded as a seller with Amazon Web Services EMEA Sarl (“AWS Europe”), AWS Europe is the Marketplace Operator for sales you make to AWS buyer accounts based in Europe, the Middle East, and Africa (“EMEA”), except Turkey and South Africa. For a full list of countries, please click here.
    • From October 1, 2022, if you have onboarded as a seller with Amazon Web Services Australia Pty Ltd ("AWS Australia"), AWS Australia is the Marketplace Facilitator for sales you make to AWS buyer accounts based in Australia.
    • From October 1, 2022, if you have onboarded as a seller with Amazon Web Services Japan G.K. (“AWS Japan”), AWS Japan is the Marketplace Operator for sales you make to AWS buyer accounts based in Japan.

    The Terms and Conditions for AWS Marketplace Sellers have been updated with AWS Europe, AWS Australia and AWS Japan replacing AWS, Inc. as the AWS Contracting Party for AWS Marketplace with respect to your transactions with buyers whose AWS accounts are located in EMEA (except Turkey and South Africa), Australia and Japan respectively. Please review the Terms and Conditions for AWS Marketplace Sellers to check if you meet the additional seller requirements (highlighted as footnotes under the Eligible Jurisdiction for Paid Products section) to determine which AWS Marketplace you are eligible to contract with.

    Determining the Marketplace Operator for an AWS MP transaction
    1. ISV and CPPO reseller in the case of CPPO AWS MP transactions
    2. AWS EMEA Sarl’s headquarters is located in Luxembourg and has branches in the following countries: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Israel, Italy, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, the UK, the Kingdom of Saudi Arabia. In these countries, business and non-business customers making marketplace purchases of Digital Services are charged local taxes. AWS EMEA Sarl also holds branches in Bahrain and UAE. Where required, AWS, Inc. is registered for VAT as a non-resident supplier of electronic services, and charges local VAT where required based on local VAT law and customer status (business/non-business).
    3. Business customers purchasing Digital Services in all other European countries are not charged local taxes. Please consult Marketplace Seller Helpage for further information.
    4. If Sellers are Japan-addressed, tax is displayed on the commercial invoices from AWS; however, buyers should reach out separately to sellers to receive tax qualified invoices, which are different from the commercial invoices that AWS issues.
    5. If Sellers are foreign-addressed, tax is not displayed on the commercial invoices from AWS; sellers should determine at its own discretion to collect taxes from buyers; buyers should reach out separately to sellers to receive tax qualified invoices if charged with taxes.
    6. Professional Services are to be delivered remotely.
    7. Customers in the US, South Africa and other countries may be charged taxes.
    8. All other countries. Sellers may be responsible for GST/VAT obligations or buyers may have an obligation to account for GST/VAT on a reverse charge basis.

  • Please be advised that a number of countries have enacted legislation which requires non-resident sellers of electronically supplied services (ESS) to charge sales tax, value added taxes (VAT), goods and services tax (GST), service tax, etc. (“Indirect Taxes”) to end buyers located in their country. A number of US states and foreign taxing jurisdictions also require marketplace operators, such as AWS Marketplace, to collect Indirect Taxes in the marketplace operator's/facilitator's own name, on sales made by a third-party marketplace seller.

    Detailed below is where AWS, as a marketplace operator/facilitator, is liable to collect Indirect Taxes in its own name and on which transactions AWS will collect Indirect Taxes on.

    If AWS does not collect Indirect Taxes, you may have an obligation to calculate, collect, invoice and remit Indirect Taxes. Please consult to your accountants or tax advisors to determine your obligation to charge applicable Indirect Taxes.

    AWS Marketplace makes available to you a tax items data feed through Seller Data Delivery Service to help you identify your Indirect Tax obligations. For more information, see AWSMP blog post and technical documentation.

    AWS Marketplace Tax Rules - How AWS Assesses Tax & Affects Invoicing
    Scenario 1: AWS is liable to collect and remit tax
    AWS MP Tax determination TAX

    In countries detailed in the section below, AWS is responsible for Sales Tax/VAT/GST/Indirect taxes in relation to marketplace sales. In these countries, AWS will invoice and collect applicable taxes from the Buyer and remit such taxes to the appropriate tax authority.

    Notes

    • The AWS Listing Fee charged to a Seller may be subject VAT/GST/Indirect taxes . If VAT/GST/Indirect taxes is charged AWS will remit taxes to the tax authority.
    • AWS does not have any withholding tax obligation or exposure as a result of the marketplace transaction, or the listing fee it charges to the Seller.
    • With respect to the marketplace transaction, any withholding tax liability or reporting obligation must be managed and paid by the applicable Buyer or Seller separate from the full amount of the MP offering that AWS collects from the Buyer on behalf of the Seller.
    • With respect to the listing fee, any withholding tax liability or reporting obligation imposed on the that transaction in the Seller’s jurisdiction must be managed by the Seller, separate from the full amount of the listing fee that AWS collects from the Seller.
    Scenario 2: AWS is not liable to collect or remit tax
    AWS MP Tax determination no tax

    In all other countries, either the Seller or the Buyer may be responsible for VAT/GST/Indirect taxes on the Marketplace sale.

    AWS will not calculate nor charge taxes to the Buyer. The Seller may be required to invoice, and collect VAT/GST/Indirect taxes to pay to the relevant Tax Authority. Alternatively, the Buyer may be responsible for self-assessing taxes in relation to their purchase.

    Notes

    • The AWS Listing Fee charged to a Seller may be subject to VAT/GST/Indirect taxes . If VAT/GST/Indirect taxes is charged AWS will remit taxes to the tax authority.
    • AWS does not have any withholding tax obligation or exposure as a result of the marketplace transaction, or the listing fee it charges to the Seller.
    • With respect to the marketplace transaction, any withholding tax liability or reporting obligation must be managed and paid by the applicable Buyer or Seller separate from the full amount of the MP offering that AWS collects from the Buyer on behalf of the Seller.
    • With respect to the listing fee, any withholding tax liability or reporting obligation imposed on the that transaction in the Seller’s jurisdiction must be managed by the Seller, separate from the full amount of the listing fee that AWS collects from the Seller.

    Please note that nothing stated herein constitutes tax advice. Please consult your tax advisors to determine whether you may have an obligation to account for any taxes.
     

    •  

      As of January 1, 2023, all US states (and certain local/city jurisdictions) require marketplace facilitators to collect and remit sales taxes on taxable transactions made by a third-party marketplace seller. Accordingly, AWS has deprecated Tax Calculation Service and the Amazon Tax Exemption Program (ATEP) on March 6, 2023. If you have participated in ATEP as an AWS Marketplace seller and require a previously issued U.S. tax exemption certificate from a third-party purchaser to support a past transaction, you can submit a Support Case to request a copy of the U.S. tax exemption certificate.

      The list below outlines the locations where, in order to comply with these marketplace facilitator laws, AWS collects sales taxes and remits these to the local tax authorities, in the name of Amazon Web Services, Inc.

      Sellers are responsible for applicable sales tax on AWS Marketplace sales prior to the effective dates listed below. AWS recommends that you consult a tax advisor to determine your tax obligations in these prior periods.

      • Alabama (January 1, 2019)
      • Arizona (October 1, 2019)
      • Arkansas (July 1, 2019)
      • California (October 1, 2019)
      • Chicago, IL (May, 1, 2022)
      • Colorado (October 1, 2019)*
      • Connecticut (December 1, 2018)
      • District of Columbia (April 1, 2019)
      • Florida (July 1, 2021)
      • Georgia (April 1, 2020)
      • Hawaii (January 1, 2020)
      • Idaho (June 1, 2019)
      • Illinois (January 1, 2020)
      • Indiana (July 1, 2019)
      • Iowa (January 1, 2019)
      • Kansas (July 1, 2021)
      • Kentucky (July 1, 2019)
      • Louisiana (July 1, 2020)
      • Maine (October 1, 2019)
      • Maryland (October 1, 2019)
      • Massachusetts (October 1, 2019)
      • Michigan (January 1, 2020)
      • Minnesota (October 1, 2018)
      • Mississippi (July 1, 2020)
      • Missouri (September 1, 2022)
      • Nebraska (April 1, 2019)
      • Nevada (October 1, 2019)
      • New Jersey (November 1, 2018)**
      • New Mexico (July 1, 2019)
      • New York (June 1, 2019)
      • North Carolina (February 1, 2020)
      • North Dakota (October 1, 2019)
      • Ohio (September 1, 2019)
      • Oklahoma (July 1, 2018)
      • Pennsylvania (April 1, 2019)
      • Puerto Rico (July 1, 2020)
      • Rhode Island (July 1, 2019)
      • South Carolina (April 26, 2019)
      • South Dakota (March 1, 2019)
      • Tennessee (October 1, 2020)
      • Texas (October 1, 2019)
      • Utah (October 1, 2019)
      • Vermont (June 1, 2019)
      • Virginia (July 1, 2019)
      • Washington State (January 1, 2018)
      • Wisconsin (January 1, 2020)
      • West Virginia (July 1, 2019)
      • Wyoming (July 1, 2019)     

       

      Sales tax will be collected on all taxable sales as determined by AWS.

       * AWS has turned off Tax Calculation Service for Colorado localities effective 4/1/2021. AWS is collecting sales tax in the Colorado localities that have both (1) enacted Marketplace Facilitator Legislation and (2) where AWS is registered for tax collection. See here for further information and a list of localities that have enacted Marketplace Facilitator legislation.

      ** Under New Jersey law, sales of pre-written software delivered electronically and used directly and exclusively in the conduct of the purchaser’s business are exempt from sales tax. We assume all New Jersey purchasers use offerings purchased on AWS Marketplace exclusively in their business.

       

      • Digital Products

      •  

        When you sell your software or data products on AWS Marketplace, there are some jurisdictions that require AWS to collect sales taxes, VAT, GST, service taxes, etc. (“Indirect Taxes”) from your customers and remit it to the tax authority in AWS’s name. In these jurisdictions, the Indirect Tax obligation generally falls on AWS, as the marketplace operator, and not you, as the legal seller. There may be exceptions to this depending on (1) which country you are incorporated in, (2) your Indirect Tax registration status, (3) where your customer is located, and (4) which AWS entity is the marketplace operator, which are further described in the notes below. Please consult with your tax advisors or accountants.

        The jurisdictions in which AWS is responsible for the Indirect Taxes (effective date noted)

        •  Australia (July 1, 2017)
        • Bangladesh (July 1, 2021)
        • Canada (July 1, 2021) (Note 1)
        • Cameroon (October 1, 2022)
        • Chile (June 1, 2020)
        • Egypt (August 1, 2023)
        • European Union (Note 2)
        • India (July 1, 2017)
        • Indonesia (August 1, 2020)
        • Kenya (October 1, 2022)
        • Kingdom of Saudi Arabia
        • Malaysia (January 1, 2020)
        • New Zealand (October 1, 2016)
        • Norway (Note 3)
        • Russia
        • Singapore (January 1, 2020)
        • South Africa
        • South Korea (July 1, 2015)
        • Taiwan (May 1, 2017)
        • Thailand (September 1, 2021)
        • Turkey
        • United Kingdom (Note 2)

        Note 1: There may be different Canadian rules that apply to sellers who are registered for GST/HST, QST, and BC PST. Please consult with your tax advisors or accountants.

        Note 2: For more information on EU and UK Indirect Taxes please see here.

        Note 3: If you are incorporated in this jurisdiction, AWS is not responsible for Indirect Taxes on your domestic sales, but you as the legal seller may be. Please consult with your tax advisors or accountants.

         

      • Professional Services

      • When you sell professional services on AWS Marketplace, there are some jurisdictions that require AWS to collect sales taxes, VAT, GST, service taxes, etc. (“Indirect Taxes”) from your customers and remit it to the tax authority in AWS’s name. In these jurisdictions, the Indirect Tax obligation generally falls on AWS, as the marketplace operator, and not you, as the legal seller.

         There may be exceptions to this depending on (1) which country you are incorporated in, (2) your Indirect Tax registration status, and (3) where your customer is located which are further described in the notes below. Please consult with your tax advisors or accountants.

        The jurisdictions in which AWS is responsible for the Indirect Taxes (effective date noted):

        • Australia
        • Canada (July 1, 2021) (Note 1)
        • New Zealand
        • Taiwan

         

        Note 1: There may be different Canadian rules that apply to sellers who are registered for GST/HST, QST, and BC PST. Please consult with your tax advisors or accountants.

      • AWS Listing Fees

      •  

        If AWS Europe is the Marketplace operator, AWS Europe is required to charge local VAT on the listing fee if your AWS Marketplace Seller account is located in Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland and the UK. For the applicable rates of VAT, please click here.

        AWS Europe charges VAT on listing fee charges incurred from 1 January 2021, unless you have a “special status”. Please note that “special status” includes:

        • International Organizations, such as the United Nations, NATO, the OECD, etc.; Please note that local charities do not qualify for special status;
        • VAT exemption purchase certificate (for e.g. VAT56B in Ireland); and
        • Article 17 split-payment in Italy.

        If applicable, AWS Europe also issues valid VAT invoices, please contact AWS Marketplace from here if you need valid VAT invoices.

        If your seller account is located in an EU country not listed above, the USA, Australia, New Zealand, the UAE or Bahrain, AWS Europe will not charge you VAT, but you may have to self-assess VAT or your local equivalent Indirect Tax if required by the local legislation. Please consult your accountant and tax advisors.

        If AWS Australia is the marketplace operator, AWS Australia will be required to charge local GST on the listing fee and issue a tax compliant invoice if the AWS Marketplace Seller account is located in Australia. If your seller account is not located Australia AWS Australia will not charge you GST, but you may have to self-assess VAT or your local equivalent Indirect Tax if required by the local legislation. Please consult your accountant and tax advisors.

        If AWS Japan is the marketplace operator, AWS Japan will be required to charge local JCT on the listing fee and issue a tax compliant invoice if the AWS Marketplace Seller account is located in Japan. If your seller account is not located in Japan, AWS Japan will not charge you JCT, but you may have to self-assess VAT or your local equivalent Indirect Tax if required by the local legislation. Please consult your accountant and tax advisors.

        If you are a seller who is required to provide a VAT/GST/JCT ("TRN") registration number as noted in the Eligible Jurisdictions list, please visit the Tax Settings page of the AWS Billing Console and confirm or update your details, including your TRN number and Business Legal Address for all of your account(s). This will ensure that your TRN is displayed on the VAT invoices issued by AWS Europe, to enable you to claim a credit for VAT charged by AWS Europe on your listing fee, in accordance with your own circumstances, as well as local laws and regulations. For additional information on TRN, please click here.

         

    •  

      As the seller, you are the legal seller of record of your offering(s). Sellers with paid products must be incorporated in an eligible jurisdiction listed in Getting started as a seller - AWS Marketplace.

      Buyers are required to review and determine their withholding tax obligations in their jurisdictions when they purchase from you on AWS Marketplace. If a buyer wants certain documentation (such as tax residency certificate or relevant forms) from you as the seller, you should discuss directly with the buyer. We recommend that you consult with your tax team for any Buyer withholding tax questions or concerns.

       

      • France

      •  

        You could be liable for French taxes and social security contributions on transactions from, with, or in France. To help you comply with any potentially applicable French tax obligations, AWS Marketplace sends you the following:

        • A monthly report listing your sales transactions from, with, or in France that occur through AWS Marketplace. The monthly reports contain the transactions from the previous month.
        • An annual report summarizing your sales transactions from, with, or in France during a given year. The annual reports are sent to you no later than January 31 of the following year.

        For more information, consult your tax adviser or see the following websites:

         

      • United States

      •  

        AWS Marketplace has begun following new-2022 IRS changes to 1099-K reporting

        The American Rescue Plan Act of 2021 which was signed into law on March 11, 2021 revised threshold changes for 1099-K reporting, beginning in 2023. Form 1099-K (Payment Card and Third-Party Network Transactions) is the form where AWS Marketplace reports the gross value of the amounts that are settled by Sellers, who are US taxpayers. Prior to this change, AWS Marketplace was only required to report on this form if the gross payments of a seller’s transactions on AWS Marketplace exceeded $20,000 in a year and the seller engaged in more than 200 such transactions in that year. Starting in 2023, this threshold has been lowered such that we are required to file a Form 1099-K for each seller who have transactions on AWS Marketplace with gross payments exceeding $600 a year. There is no longer a minimum number of transactions that the seller needs to have engaged in as was previously the case. For more information, see Understanding Your Form 1099-K.

        This law does not change the amount of taxes that US taxpayers are required to pay under US federal income tax law. It only changes the reporting requirement for AWS Marketplace. Consistent with our past practice, for any Form 1099-K that AWS Marketplace reports to the IRS, a corresponding copy of that Form 1099-K will be sent to the relevant taxpayer in early 2023 for the 2022 tax year.

        If you have any additional questions about how this tax law change will affect you, we recommend you reach out to your tax advisor for additional information.

         

      • Colombia

      • In Colombia, AWS is not liable to collect or remit Colombian VAT on AWS Marketplace transactions. If you are registered for Colombian VAT and make sales to Colombian customers, you may be responsible for issuing a valid electronic invoice.

        If you are required to charge Colombian VAT on your electronic invoice, your AWS Marketplace listing should be tax inclusive. AWS will collect and remit to you the tax inclusive amount and Colombian Buyers' VAT IDs to help you comply with your tax reporting and invoicing obligations.

      • EU DAC 7 Reporting

      • In accordance with the EU Directive on Administration Cooperation (2011/16/EU) – 7th amendment (EU) 2021/514 – (“DAC7- Directive”) Amazon Web Services Marketplace (“AWS”) is required to collect and verify the identity and residency information of AWS Marketplace Sellers who do and will provide “Relevant Activities” on AWS Marketplace.

        If you are an AWS Marketplace Seller who provides professional services on AWS Marketplace, or you are an AWS IQ Expert who offers professional services on AWS Marketplace, you will be considered to conduct “Relevant Activity” reportable under DAC7. You are required to complete DAC7 interview* and provide your identity and residency information such as Tax Identification Number, business registration number, existence of permanent establishment, etc. in the interview and validate the information, where applicable. Please visit the tax dashboard in the Payment Information section of your AWS Marketplace Management Portal.

        If you are a member of a group whose shares are traded on a recognized securities exchange or if you are a government entity, you are not required to provide all information, but you need to complete DAC7 tax form by confirming your status.

        If you are a seller on AWS Marketplace and your offerings are solely software or/and other digital offerings on AWS Marketplace, you are not required to provide all information, but you need to take the DAC7 tax form to confirm your offerings do not include professional services.
        AWS Marketplace will report collected and verified identity and residency information of EU based sellers to the relevant Tax Authorities alongside other information (like revenue earned, AWS Marketplace fees charged, financial account details). AWS Marketplace will also provide a copy of the information to the sellers whose information is reportable to the relevant Tax Authorities.

        If you have any additional questions about how DAC7 may impact you, we recommend you reach out to your tax advisor for additional information.

    • Tax Settings

    • The tax information you provide in your Tax Settings is what AWS uses to calculate any applicable taxes. You must ensure your information in the AWS Billing Management Console is accurate and up-to-date. It must match the seller entity information you submitted when you registered your seller account. If it does not match or you are changing your seller entity, you must re-take the tax interview in your AWS Marketplace Management Portal.

    • Data Feeds

    • To receive additional information about your buyers that are not available in the Seller Reports, such as Tax Registration Number, Customer Name, Customer Address, etc., you must sign up for the Seller Data Delivery Service. For more information, please see this article.

    • Geofencing

    •  

      To the extent you would like to sell your product to specific countries, AWS Marketplace makes available to you a geo-fencing feature. For more information, please see this article.

       

  • DAC7- Directive

    In accordance with the EU Directive on Administration Cooperation (2011/16/EU) – 7th amendment (EU) 2021/514 – (“DAC7- Directive”) Amazon Web Services Marketplace (“AWS”) is required to collect and verify the identity and residency information of AWS Marketplace Sellers who do and will provide “Relevant Activities” on AWS Marketplace.

    If you are an AWS Marketplace Seller who provides professional services on AWS Marketplace, or you are an AWS IQ Expert who offers professional services on AWS Marketplace, you will be considered to conduct “Relevant Activity” reportable under DAC7.

    You are required to complete DAC7 interview* and provide your identity and residency information such as Tax Identification Number, business registration number, existence of permanent establishment, etc. in the interview and validate the information, where applicable. Please visit the tax dashboard in the Payment Information section of your AWS Marketplace Management Portal.

    If you are a member of a group whose shares are traded on a recognized securities exchange or if you are a government entity, you are not required to provide all information, but you need to complete DAC7 tax form by confirming your status.

    If you are a seller on AWS Marketplace and your offerings are solely software or/and other digital offerings on AWS Marketplace, you are not required to provide all information, but you need to take the DAC7 tax form to confirm your offerings do not include professional services.

    AWS Marketplace will report collected and verified identity and residency information of EU based sellers to the relevant Tax Authorities alongside other information (like revenue earned, AWS Marketplace fees charged, financial account details). AWS Marketplace will also provide a copy of the information to the sellers whose information is reportable to the relevant Tax Authorities.

    If you have any additional questions about how DAC7 may impact you, we recommend you reach out to your tax advisor for additional information.