German tax authorities crack down on Chinese sellers

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The German tax authorities have cracked down on Chinese sellers trading on Amazon in a big way. Following HMRC’s struggles to get Chinese sellers to register to pay VAT, Germany have gone nuclear on potential tax evasion.

German marketplace blog Wortfilter reports that Germany has required Amazon to freeze all assets of Chinese sellers who are under investigation. This includes a freeze on any funds in their Amazon account as well as confiscating their inventory in Amazon FBA.

“Amazon receives notification from German” tax institute “(ie tax office) that it does not fulfill the requirement of regulation of German sales tax”. You are not allowed to sell on Amazon. You may not take back your inventory in FBA, because German laws require us to block the goods until you have met the requirement of German tax authorities. If you still have funds on your Amazon Payments Europe SCA account, it will also be blocked as requested by the German tax authorities”
– Wortfilter translation of Amazon message to Chinese sellers

Naturally Chinese sellers are going ballistic – according to local chatter FBA items funds in the multiple millions of Euros have been seized and Amazon aren’t going to be releasing the funds or the stock until the sellers impacted settle up their tax affairs in Germany.

The German approach is somewhat admirable compared to the UK, there’s been no messing about, just a simple confiscation of goods and funds until the sellers make good their tax affairs.

8 Responses

  1. Maybe our own Tax Authorities might want to grow some and actually DEAL with the tax evasion here, not just from sellers from China, but with the likes of eBay and Amazon themselves.

  2. Bravo! Germany….

    HMRC should do the same for such sellers AND domestic sellers who have the same mentality

  3. For me personally it’s been 4 years since the large Chinese sellers flooded ebay U.K. With warehouse stock and destroyed the retail/ market value of products in our category, not paying tax and just royally taking the mick

    I’m glad someone somewhere is finally doing something to level the playing field slightly. Maybe HMRC will follow

  4. Ebay have actively encouraged Chinese sellers to take over.. let’s build a search engine that shows the fastest selling/cheapest items first where there’s lots of inventory and let’s not show them the business location only the item location

  5. Well done Germany. … but the chances of a level playing field being introduced in the UK is a pipe dream. China can refuse to take our waste plastic but we cannot stop the UK being flooded with their new stuff and we give them tax concessions for the privilege. And don’t even get me started on China Post…..

  6. The critical point here is that the German Tax Authorities have SEIZED the goods. In the UK they have allowed them to remove the stock and keep the listings.
    They have just relisted under a Phoenix account and have happily carried on regardless.

  7. HRMC are not fit for purpose, you have these Tax dodgers getting away with it both Chinese and Domestic.
    As well as making companies like our own who pay VAT uncompetitive it also hurts the tax intake as us who do play by the rules will be paying less in tax. I put the blame firmly at the door of the UK Gov and HRMC.
    Plus they Need to close the LVCR loopholes which UK companies are themselves abusing.


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