- Amazon said it is going to raise fees for its
third-party sellers in France by 3% after being hit by the new
digital services tax in the country.
- The new tax was approved by the French Senate in July.
It requires tech firms with global revenue of more than €750
million, or $831 million, to pay a 3% tax on sales.
- The tax is unusual in that it relates to revenue, not
profit. Amazon, Facebook, and Google are all fighting to resist the
- Amazon’s plan to pass the buck to third-party sellers could
further raise tensions with firms that do business on its
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Amazon is about to be stung with a new tax in France but rather
than absorb the cost itself, it’s passing it on to third-party
sellers in a move that could further raise tensions with firms that
do business on its platform.
The French government last month approved plans to clobber tech
companies with global sales of more than €750 million ($831
million), with a 3% levy on their revenue, in addition to the more
traditional method of taxing profit.
Amazon, Facebook, and Google are all fighting to resist the
submitting evidence last week to an
investigation by US Trade Representative Robert Lighthizer into
France’s new tax plan.
In its submission, Amazon said third-party sellers in France
will see fees increase by 3% from October 1 to account for the new
digital services tax. On Monday, Jeff Bezos’ company doubled down
on this plan.
“Because we operate in the highly competitive and low-margin
retail industry and invest heavily in building tools and services
for selling partners and customers, we cannot absorb an additional
consumption tax that is based on revenues instead of profits,” a
spokesperson for the company told
“This tax is aimed squarely at the marketplace services we
provide to businesses, so we had no choice but to pass it down to
selling partners.” Amazon is expecting this to trickle down to
consumers in France as small businesses are likely to raise prices
to account for these higher fees.
Amazon did not immediately respond to Business Insider’s request
“Amazon will use them when necessary and dispose of them when
appropriate. There’s no love there.”
Amazon’s plan to pass the cost of France’s new tech tax onto
French businesses may be a lobbying technique, but it risks
heightening existing tensions with third-party sellers.
Amazon’s third-party platform is one of the most valuable areas
of its businesses,
accounting for $307 billion of the company’s $1.1 trillion
enterprise value and
comprising 58% of all merchandise sales. For comparison, its
first-party platform is worth $93 billion.
But while these sellers are a crucial part of Amazon’s business,
Amazon is also likely a crucial part of their business too as for
many, this might be the only way to sell their products to a wider
audience. This means that Amazon has the power to raise fees
without having to worry too much about a mass exodus from the
Amazon has come under
scrutiny for its business practices on its third-party platform
– specifically for its role as both a platform for merchants and
a seller as
reports surfaced indicating it had been using sellers’ data to
create its own versions of best-selling items.
As a result, third-party sellers are gearing up to
complain to the Department of Justice and Federal Trade Commission
about why Amazon is competing against them too.
“I think a lot of sellers sense who they’re up against and that
Amazon’s not their friend,” Paul Rafelson, a tax law attorney at
Francissen Rafelson Schick, LLP whose practice is focused on
helping Amazon sellers, told
Business Insider’s Rachel Premack. “Amazon will use them when
necessary and dispose of them when appropriate. There’s no love