The Canadian government has implemented a digital services tax (DST), similar to those in the UK, France, Italy, and Spain. To account for this, a digital services fee will be introduced on October 1, 2024.
The DST rates vary across countries, with the UK imposing a 2% rate, while Canada, France, Italy, and Spain have set it at 3%. However, the actual charges can fluctuate based on multiple factors, such as the business’s location and the buyer’s location, leading to potential unpredictability in business impacts.
To mitigate these uncertainties, the digital services fee will be a fixed rate, determined solely by the seller’s location and the store in which they conduct sales. Notably, this fee will not apply to domestic transactions for businesses based in the United States selling through the US store.
For businesses operating from countries with DST—namely the UK, France, Italy, Spain, and Canada—the fee will apply to sales made in the US store. The specifics of the fee depend on the country of establishment.
- Canadian businesses selling a $15 item in the US store will incur a 3% fee on Amazon selling fees.
- UK businesses selling a $15 item in the US store will incur a 2% fee on both Amazon selling and FBA fees.
To aid businesses in understanding the impact of these fees, a comprehensive guide, including country-specific rates and examples, is available on the Digital Services Fee page.
- From September 1, sellers can preview fees in the Revenue Calculator.
- Starting October 1, fees can be tracked via the Transaction View in Payments reports.
- The fee will be integrated into the Automate Pricing tool for those using Remote Fulfillment with FBA.
For more detailed information, sellers are directed to the Digital Services Fee section for rates by country and examples.
15 Nov, 2024
