Amazon jolted

Germany cracks down on online tax cheats

Amazon, ebay, taxes
A worker sorts packages at Amazon's new distribution center near Berlin. Source: Reuters

The German government has launched a crackdown on a problem that has long bedeviled U.S. states – online retailers who don’t pay any sales tax.

The problem in Germany is with Chinese traders, who make up about one-third of transactions on platforms such as Amazon and Ebay. One trading expert told Handelsblatt that Germany could be losing €1 billion ($1.2 billion) a year in revenues.

At the height of the Christmas shopping season, tax authorities from the Neukölln borough of Berlin, which is responsible for the tax registration of Chinese companies selling goods in Germany, ordered an Amazon warehouse to sequester goods worth millions of euros being stored for nearly a hundred Chinese merchants, meaning that Amazon is prohibited from removing them from the warehouse or reselling them until the merchants pay their tax debt. Amazon also froze the traders’ accounts with the platform.

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