South Korea VAT on Amazon Selling Fees: What Sellers Need to Know
Amazon collects 10% VAT on selling fees for South Korean resident sellers without a valid Business Registration Number (BRN) on file, effective since July 2019. Sellers can avoid the charge by adding their BRN in Seller Central.
Overview
Amazon sellers operating on South Korea's marketplace should be aware of value-added tax (VAT) requirements that apply to selling fees. Since July 1, 2019, Amazon has been required to collect and remit a 10% VAT on various service fees charged to sellers who are residents of South Korea and have not provided a valid Business Registration Number (BRN). Understanding these rules and ensuring your tax information is up to date can help you avoid unnecessary charges on your selling fees.
Key Points / What Sellers Need to Know
- 10% VAT on selling fees — Amazon collects a standard 10% VAT on selling-on-Amazon fees for South Korean resident sellers who do not have a valid BRN on file.
- Effective since July 2019 — South Korea expanded its remote services legislation to require non-resident companies like Amazon to collect VAT on service fees including listing fees, referral fees, and monthly subscription fees.
- BRN exemption available — Sellers who provide Amazon with a valid 10-digit South Korean BRN will not have VAT applied to their selling fees.
- Applies to both Individual and Professional accounts — Regardless of account type, the VAT rules apply equally. If no BRN is provided, Amazon must impose the 10% VAT.
- Seller responsibility to manage — Amazon does not send individual reminders about missing BRN information. It is each seller's responsibility to check and update their VAT status.
How the VAT Collection Works
Under South Korea's expanded electronic services supplier (ESS) rules, non-resident companies that provide remote services to Korean residents must collect VAT when those residents are not registered for VAT. Amazon calculates and collects the 10% VAT on each individual order sold, meaning the charge is applied on a per-transaction basis rather than as a lump sum. The fees subject to this VAT include referral fees, subscription fees, and other standard selling-on-Amazon service charges. Sellers can review their VAT charges through Seller Central's date range reports by navigating to the transaction report section and selecting the relevant timeframe.
How to Add Your Business Registration Number
Analysis & Recommendations
Why This Matters
South Korean Amazon sellers who haven't registered their BRN are paying an extra 10% on every selling fee. This directly impacts profit margins and is easily avoidable by updating account settings in Seller Central.
Key Takeaways
- Amazon charges 10% VAT on all selling fees for South Korean resident sellers without a BRN on file
- Adding a valid 10-digit BRN to your Seller Central account immediately stops VAT charges on fees
- The VAT applies per transaction to referral fees, subscription fees, and other service charges
- Amazon will not refund previously collected VAT, so registering your BRN early is essential
Recommended Actions
- →Log into Seller Central and add your South Korean BRN under the VAT information section if you haven't already
- →Review your date range reports to check how much VAT has been collected on your selling fees
- →Consult a tax adviser if you're unsure about your VAT registration status or obligations in South Korea
Comments
Join the discussion
Log in or create an account to share your thoughts on this update.
No comments yet. Be the first to share your thoughts!