Proforma 1120 and 5472

As an Amazon foreign seller, you may be unaware of the various U.S tax obligations and reporting requirements that come with selling on one of the world's largest e-commerce platforms. In addition to 1099-K reporting, foreign sellers must also be familiar with proforma 1120 and Form 5472. This article provides a comprehensive overview of these tax requirements and how they apply to Amazon foreign sellers.

1099-K Reporting

The 1099-K form is a tax document that reports gross payment card and third-party network transactions to the Internal Revenue Service (IRS). This form is issued to merchants who process more than 200 transactions and receive payments totaling more than $20,000 in a calendar year. As an Amazon foreign seller, if you receive payments through Amazon's platform, you may be subject to 1099-K reporting.

U.S Tax Obligations for Amazon Foreign Sellers

Foreign sellers on Amazon may have U.S tax obligations if they sell goods or services to U.S customers. The tax treatment of foreign sellers depends on various factors, including the type of goods or services sold, the location of the seller, and the location of the customer.

If you sell goods to U.S customers, you may be subject to U.S sales tax. This tax is imposed by individual states and is based on the location of the customer. Foreign sellers are required to register with the relevant state tax authorities and collect and remit sales tax on their sales to U.S customers.

If you sell services to U.S customers, you may be subject to U.S income tax. This tax is imposed on the net income derived from the sale of services to U.S customers. Foreign sellers are required to file a U.S tax return and pay U.S income tax on their net income from the sale of services to U.S customers.

Proforma 1120 and Form 5472

In addition to 1099-K reporting and U.S sales tax or income tax, foreign sellers on Amazon may also be required to file a proforma 1120 and Form 5472.

Proforma 1120 is a tax return that foreign corporations must file to report their U.S-source income. This form is required if the foreign corporation has a U.S trade or business and is not otherwise required to file a U.S corporate tax return.

Form 5472 is a tax form that foreign-owned corporations must file to report certain transactions with foreign-related parties. This form is required if the foreign corporation is engaged in a U.S trade or business and has certain reportable transactions with foreign-related parties.

Conclusion

In conclusion, foreign sellers on Amazon must be aware of their U.S tax obligations, including 1099-K reporting, U.S sales tax or income tax, and proforma 1120 and Form 5472. To avoid any tax issues, it is recommended that you seek professional advice from a tax expert. By understanding these tax requirements, you can ensure that you are in compliance with all relevant U.S tax laws and regulations, and avoid any potential penalties or fines.