Amazon – Challenges of VAT Compliance for Merchants and Suspension of Accounts

Digital marketplaces like Amazon, Alibaba, and eBay have revolutionized e-commerce by allowing businesses to sell their products to customers in different countries. This has led to a significant increase in cross-border transactions. These platforms have particularly benefited small and medium-sized businesses, as they offer a less bureaucratic alternative to opening physical stores in multiple countries.
However, the rapid growth of these digital marketplaces has also presented legal and technological challenges. Regulators are struggling to develop effective legislative frameworks to keep up with this new business model.
In particular, Amazon has the power to suspend a seller’s account for various reasons, including non-compliance with VAT rules. The implementation of the e-commerce package in July 2021 has further increased the liability requirements for platforms.
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