Why Amazon Is Raising Fees for Thousands of Sellers in France

Amazon’s third-party merchants in France will soon have to contend with an added seller fee — courtesy of a new digital tax passed last month by the country’s government.

The e-commerce behemoth reportedly informed small- and medium-sized business owners in the region that they would have to pay a 3% fee for selling their products on its site — a result of the French Senate’s recent ruling to tack a 3% tax on the sales made in France by roughly 30 major tech companies. The tax would take effect as soon as Oct. 1.

“This tax is aimed squarely at the marketplace services we provide to businesses, so we had no choice but to pass it down to selling partners,” an Amazon spokesperson said in a statement to CNBC. “We recognize that this may place small firms in France at a competitive disadvantage to their counterparts in other countries.”

Among the tax’s critics is President Donald Trump, who launched an investigation into France’s plan last month and threatened to impose tariffs in retaliation. A statement released in mid-July by the U.S. Trade Representative expressed concern that the tax “unfairly targets American companies,” which make up a majority of the names on the list — including Big Four members Google and Facebook.

A report published last year by the European Commission estimated that global tech companies were to pay an average tax rate of 9.5%, compared with 23.2% for traditional businesses.

According to French finance minister Bruno Le Maire, the tax could generate 500 million euros annually (or roughly $554.6 million at current exchange). It would impact companies that rake in revenues from “digital activities” of at least 750 million euros, or nearly $832 million.

Executives from the companies are expected to testify today at a U.S. government hearing about the French digital tax. Following a period allowing public commentary, the USTR office could potentially slap tariffs on French imports starting next week.

Submitting joint testimony to last month’s probe, a coalition of tech firms including Amazon, Google and Facebook — as well as Airbnb, Salesforce and Twitter — wrote that the tax was “unjustifiable in that it infringes on international agreements, and unreasonable in that it is discriminatory, retroactive and inconsistent with international tax policy principles.”

Countries such as Britain, Italy and Spain are also mulling their own taxes on tech giants.

Want more?

Amazon Just Raised the Stakes in the Personal Styling Service Wars

Amazon’s One-Day Prime Shipping Was a Drag on Earnings — Here’s Why the E-Giant Is Still Betting On It

Watch FN’s interview with these top shoe players.

TOMS Sponsored By TOMS

Building Business to Improve Lives

TOMS discusses its approach to mental health awareness and female empowerment through impact initiatives in the footwear segment.
Learn More

Access exclusive content