Amazon sellers across the globe have recently received their quarterly tax reports from the platform - a mandatory requirement under new tax regulations. While these reports serve as crucial documentation for tax authorities, many sellers find themselves puzzled by discrepancies between Amazon's figures and their own calculations.
Understanding Amazon's Tax Reporting Requirements
Beginning October 2025, Amazon initiated quarterly tax information reporting for Chinese sellers operating on its global marketplaces. This compliance measure stems from national tax regulations requiring platforms to disclose seller transaction data to tax authorities.
The initial reports for Q3 2025 (July-September) were distributed in December 2025, with follow-up reminders sent in January 2026. These reports contain identical information to the initial submissions, serving primarily as a backup notification for sellers who may have missed the first distribution.
Who Receives These Reports?
All sellers registered in China who conduct business on any Amazon marketplace (including the US, Europe, Japan, and Australia) are subject to these reporting requirements. Amazon provides tax authorities with comprehensive business data including:
- Business registration information
- Store details
- Transaction amounts
- Commission expenses
Common Discrepancies and Their Causes
Many sellers report inconsistencies between Amazon's tax reports and their internal accounting. Amazon has acknowledged these differences in their recent FAQ document, explaining that variations occur due to different reporting methodologies.
1. Exchange Rate Variations
Tax regulations require Amazon to report all figures in Chinese Yuan. The platform converts transaction amounts using the exchange rate on the day each order shipped. This differs from sellers' typical practice of using monthly average exchange rates for accounting purposes.
2. Reporting Period Differences
Amazon's quarterly reports use the shipment date as the transaction date, while many sellers track payments based on when funds are received. This creates timing differences for orders that ship in one quarter but are paid in another.
3. Inclusion of Foreign Taxes
The most significant discrepancy comes from Amazon's inclusion of foreign taxes (like European VAT or US sales tax) in the reported revenue. While these amounts are ultimately remitted to foreign tax authorities, Amazon reports them as part of the gross transaction value.
4. Advertising Fee Exclusions
Amazon's reports include most platform fees but exclude Display Video Advertising (DVA) expenses through the DSP platform. Sellers who incorporate these costs in their accounting will notice this omission.
Best Practices for Tax Compliance
Sellers should implement these strategies to ensure proper tax reporting:
- Download and archive reports promptly: Maintain both digital and physical copies for at least five years.
- Verify email delivery: Check spam folders and confirm your registered email address is current.
- Understand tax obligations: Different business structures (small-scale vs. general taxpayers) have distinct reporting requirements.
- Maintain proper documentation: Keep records of foreign tax payments to support domestic tax filings.
Tax Strategies by Business Type
Small-scale taxpayers (annual taxable sales under ¥5 million) should focus on:
- Collecting standard invoices for expense documentation
- Utilizing appropriate export models (9810/9710/9610)
- Claiming export tax exemptions
General taxpayers (annual taxable sales over ¥5 million) can:
- Use the 9810 export model
- Apply for export tax rebates
- Maintain proper input tax documentation
While Amazon's tax reporting requirements may initially seem burdensome, they represent an opportunity for sellers to establish proper accounting practices and ensure long-term compliance. By understanding the reporting methodologies and maintaining accurate records, sellers can navigate these requirements with confidence.