Tax question

Sell On Amazon General Selling on Amazon Questions
1

Hi,

I have a question regarding Tax/VAT. I recently started my business in a UAE Freezone, and I live in Dubai. However, I use a prep center to prepare my packages and send them to an Amazon warehouse.

My question is, I sell in the UK, USA, and Canada, and I have Walmart tax exemption.

In the UAE, there is 0% tax and 5% VAT, but how does it work when I sell my products in the UK, USA, and Canada? I have my UAE company registration, and I live in Dubai. Do I need to comply with UAE tax and VAT laws where I live, or do I need to follow the tax laws of the countries where my products are sold, which are the UK, Canada, and the USA?

P.S. These are not my own products; I am an FBA and FBM seller, and I buy from third parties.

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Since your company is registered in a UAE Freezone, you will need to comply with UAE tax and VAT laws for your business activities within the UAE, including any sales made within the country. As of my last update in September 2021, UAE has a 0% corporate tax rate and a 5% VAT rate.

For sales made in the UK, USA, and Canada, you will need to follow the tax and VAT rules of each respective country:

  • UK: If you’re selling to customers in the UK, you may need to register for UK VAT and collect VAT from customers based on the UK’s VAT rates. The specific rules can vary, so it’s advisable to consult with a tax professional or the UK tax authorities for guidance.

  • USA: The United States doesn’t have a federal VAT like the UAE, but it has state-level sales taxes. You might be required to collect sales tax depending on the state(s) where your products are stored or sold. Sales tax rules can be complex and differ from state to state.

  • Canada: In Canada, the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are applicable. Depending on the province and your sales volume, you may need to register for GST/HST and charge it to customers.

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3

When you sell your products in the UK, USA, and Canada, you will need to comply with the tax and VAT laws of those countries. The tax and VAT regulations will be based on the country where the products are sold, not where your UAE company is registered or where you live in Dubai. Make sure to familiarize yourself with the tax requirements of each country to ensure compliance.

In the UK, VAT rates range from 8% to 20%, depending on your VAT registration. In the US, there is no VAT.

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