Imagine your products finally listed on Amazon, orders pouring in like snowflakes, just as you prepare to celebrate—when suddenly a platform notification arrives warning of account risks due to tax or compliance issues. This isn't alarmism but a real predicament many cross-border e-commerce sellers face. In global markets, compliance isn't optional; it's the lifeline of international trade. This examination focuses on key compliance requirements across Amazon's major marketplaces to help sellers navigate regulatory minefields and achieve sustainable growth.
Europe: The Core Battleground for Compliance
The European market, with its mature e-commerce ecosystem and vast consumer base, attracts countless sellers. Yet its compliance landscape remains particularly complex, spanning four critical areas:
1. Tax Compliance: VAT Registration and Filing
Value Added Tax (VAT), a consumption levy on goods and services across EU nations, represents the foremost compliance priority. Registration typically becomes mandatory under these circumstances:
- Warehouse presence: Any merchandise stored in European warehouses (including Amazon FBA and third-party facilities) triggers VAT registration in that country.
- Business-to-business sales: Sellers primarily serving corporate buyers must register regardless of sales volume.
The VAT compliance process involves three key steps:
- Obtaining a VAT identification number from relevant tax authorities
- Periodic reporting (usually monthly or quarterly) of sales and VAT liabilities
- Timely remittance of owed VAT before filing deadlines
Critical reminder: Ignoring communications from tax authorities may lead to severe penalties or account suspensions.
2. Environmental Compliance: Extended Producer Responsibility (EPR)
EPR policies hold producers accountable for their products' environmental impact throughout the lifecycle—including recycling, treatment, and reuse. Germany and France enforce particularly stringent EPR requirements, mandating category-specific registrations for packaging, electronics, batteries, and other product types.
3. Commercial Safety: General Product Safety Regulation (GPSR)
The EU's foundational product safety legislation applies to all consumer goods, requiring producers to guarantee compliance with safety standards. Products bearing CE marks must designate an EU-based responsible person for compliance matters—absence of which creates legal exposure.
Japan: Navigating the New JCT Invoice System
Japan's compliance landscape transformed with the October 2023 implementation of Japanese Consumption Tax (JCT) invoice retention requirements. The system's key provisions include:
- Business purchasers requiring tax deductions must receive invoices containing valid JCT registration numbers
- Sellers predominantly serving such buyers must register for JCT and issue compliant invoices
Required seller actions:
- Assess registration obligations based on customer profile
- Submit JCT registration applications to Japan's National Tax Agency when required
- Upload obtained registration numbers to Amazon Seller Central
Mexico: The RFC Tax ID Imperative
For U.S. FBA sellers expanding to Mexico, the Registro Federal de Contribuyentes (RFC) identification number carries significant operational and financial implications:
- FBA activation: First-time Mexico FBA shipments require RFC submission
- Tax withholding: Amazon calculates monthly income tax (ISR) and VAT (IVA) deductions based on RFC status
Non-registration risks include Amazon withholding 36% combined taxes (20% ISR + 16% IVA), while compliant sellers remit only 16% VAT directly to authorities.
Middle East: VAT Compliance in Emerging Markets
The rapid e-commerce growth in UAE and Saudi Arabia comes with strict VAT requirements:
- Registration triggers: Sellers using FBA in these countries must register for local VAT within 30 days of first FBA sale
- Exemptions: Merchant-fulfilled network (MFN) sellers avoid VAT obligations
Both nations impose clear penalties for non-registration, late filings, or payment delays. While UAE permits self-registration through tax authority portals, Saudi Arabia's Arabic-only platform and local phone verification requirements make professional representation advisable.
The Compliance Foundation for Global Success
In international e-commerce, regulatory compliance forms the bedrock of sustainable operations. Understanding and adhering to marketplace-specific requirements prevents unnecessary risks while enabling global expansion. Proactive planning, professional consultation when uncertain, and continuous monitoring of evolving regulations remain essential practices for cross-border sellers.