Selling on Amazon USA: Account, FBA, Customs and Sales Tax

The American online market is huge. With more than 330 million consumers and exceptionally high purchasing power, the USA is the most important e-commerce market in the world. For European entrepreneurs, Amazon USA in particular offers an attractive way to sell products directly to American customers without having to open a physical store right away.

But if you want to enter the US market as a European entrepreneur, you need to know the tax and legal hurdles as well as the opportunities. This article gives you a comprehensive overview of how selling on Amazon USA works, which structures make sense and what to watch out for on the tax side.

1Why Amazon USA is so attractive for European entrepreneurs

• Market size: Amazon dominates American online retail with a market share of more than 40%.

• Purchasing power: American customers are used to shopping online and spend significantly more per order on average than European customers.

• Easy scaling: Once a product is established, it can be sold nationwide through Amazon's logistics network (FBA, Fulfillment by Amazon).

• Brand building: Many German brands enjoy a special reputation in the USA ("Made in Germany" still stands for quality).

2The basics for getting started

To sell on Amazon.com, you need a seller account. For entrepreneurs from Europe, that is no problem. Still, some important questions come up right at the start:

• Are you selling as an individual or as a company?

• Which company structure makes sense: a company in your home country, a US structure (LLC, Corp or LP) or a holding structure?

• Which bank and tax registrations do you need?

This is where it is decided whether your business model will succeed in the long run or be held back by unnecessary tax burdens.

3Opening an Amazon USA seller account

You register as a seller online. Among other things, you will need to provide:

• Passport or ID card (for identification)

• Credit card

• Business bank account (USD recommended, but not required)

• Tax information

Amazon usually requires international sellers to submit a W-8BEN or W-8BEN-E form. It is used for tax reporting, and which one you need depends on whether you sell as a sole proprietor or as a company.

4Logistics: Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM)

The most important decision concerns logistics:

• FBA (Fulfillment by Amazon): You send your goods to an Amazon warehouse in the US. Amazon handles storage, shipping, returns and customer service. Getting started costs more (because of customs and import handling), but it scales.

• FBM (Fulfillment by Merchant): You store and ship the goods yourself, usually from Europe or through your own US warehouse. This can make sense for niche products or very expensive goods.

For European entrepreneurs, FBA is almost always the better choice, because American customers expect extremely fast delivery.

5Importing into the USA: customs and taxes

Before your goods can sit in an Amazon warehouse in the USA, they have to be imported. Key points:

• Tariffs: These depend on the product category. Check whether punitive tariffs apply to certain products (e.g. steel, electronics).

• Customs broker: Most sellers hire a licensed customs broker to import into the USA. It is not mandatory, though: as the importer, you may also clear your own goods yourself.

• Product approvals: Many products (e.g. food, electronics, cosmetics) are subject to special US rules (FDA, FCC).

6Tax aspects for European entrepreneurs

6.1a) Income tax in the USA?

Important to understand: Simply selling on Amazon USA through a European company does not automatically make you taxable in the USA.

• As long as the company does not build up "substance" in the USA (e.g. an office, its own staff, active management on the ground), there is neither Effectively Connected Income (ECI) nor an Engaged in Trade or Business (ETBUS) situation.

• Using Amazon FBA warehouses on its own does not create a taxable permanent establishment in the USA either, because Amazon acts as an independent fulfillment service provider.

How far this principle goes is shown by our sister firm zerotax.llc: it specializes in US LLCs that remain tax-free with no US permanent establishment at all.

6.2b) Sales tax

Sales tax is a different story. This state-level tax is due on sales to US customers. In most cases, however, Amazon collects and remits the sales tax automatically, so it creates hardly any extra work for the seller.

6.3c) The exception: additional substance in the USA

Only when a European company builds its own structures in the USA (e.g. rents an office, hires staff or actively works the market from there) can a permanent establishment under the tax treaty arise. In that case, part of the profits would become taxable in the USA.

7Comparison: selling from Europe vs. with a US structure

Selling directly through a European company:

• Pros: no US corporate income tax, profits are taxed in your home country.

• Cons: returns from the US can be more complicated, and banking and payments in USD are limited.

Selling through a US structure (e.g. an LLC or corporation in Delaware, Wyoming or Texas):

• Pros: a professional market presence and easier access to US bank accounts and credit cards.

• Cons: ongoing administrative costs; if you have a US permanent establishment, US tax applies.

Hybrid structure (e.g. a European holding company + a US LLC):

• Pros: tax optimization and a clean separation of markets.

• Cons: complex, and it needs professional advice.

8Bank account and payments

By default, Amazon pays out to international bank accounts. Even so, it makes sense to open a US bank account. The benefits:

• faster payouts

• smaller currency losses

• a foundation for US credit cards later on (the issuer decides on the card and the limit)

Many European entrepreneurs use a US LLC for this, making it easier to open a business account with a major traditional US bank.

9Product strategy: what works in the USA?

Not every product that sells well at home automatically becomes a bestseller in the USA. The differences:

• Design & size: American customers often prefer bigger products (e.g. XL packs).

• Price: American customers are price-sensitive, yet brand-conscious at the same time.

• Marketing: storytelling and emotional appeal work better than dry product descriptions.

10Risks of selling on Amazon USA

• Account suspension: Amazon is notorious for suspending seller accounts over the smallest policy violations.

• Product liability: damage claims in the USA can get extremely expensive. US product liability insurance is strongly recommended.

• Currency risk: revenue in USD, costs in your home currency: exchange rate swings can eat into your profits.

12How it compares with Europe

In Europe, value added tax (VAT) follows a harmonized framework; the USA has a federal system. The legal culture differs too: in the USA, every detail (such as warning labels on packaging) has to be right. On the other hand, margins are higher and the market is less fragmented.

13Step-by-step roadmap for European entrepreneurs

1. Market analysis: which products have potential in the USA?

2. Choice of structure: direct sales vs. a US structure.

3. Open your Amazon account (with W-8 forms).

4. Sort out logistics: FBA or FBM.

5. Prepare for import: customs, licenses, product approval.

6. Check sales tax registration.

7. Build your marketing strategy: PPC campaigns, branding.

8. Legal protection: product liability, terms and conditions, returns.

14Good advice makes the difference

Many entrepreneurs don't fail because of the product idea, but because of structure and tax questions. The wrong setup can lead to double taxation, frozen accounts or import problems.

Mount Bonnell Advisors regularly helps clients from Europe enter the US market, especially when selling on Amazon USA. We help with:

• Forming US LLCs, corporations and LPs

• Bank account opening and ITIN applications

• Import and customs matters

• Tax optimization and tax treaty questions

15What this means for you

For European entrepreneurs, the American market holds enormous potential, but it is also a minefield. Prepare the move professionally (with the right structure, banking and product strategy) and you can reach sales on Amazon USA within a few months that would take years in Europe.

Courage, capital and the right advice are the keys to success.

16Request a consultation

If you're thinking about scaling your business on Amazon USA, get in touch. The experts at Mount Bonnell Advisors will guide you from the first idea all the way to a successful launch in the USA.

Book a consultation now

To go deeper, read how marketplace seller registration works and which state sets which nexus thresholds; you'll find more articles under News.

In short

• To sell on Amazon.com you need a seller account; Amazon usually requires international sellers to submit a W-8BEN or W-8BEN-E.
• For European entrepreneurs, FBA is almost always the way to go, because American customers expect very fast delivery. Before you get to the warehouse come import, a customs agent and product approvals.
• In most cases, Amazon collects and remits the sales tax itself.
• A US bank account means faster payouts, smaller currency losses and a foundation for US credit cards later on.

How we help you

• US market entrySubsidiary, staff, taxes: your start in the US market.
• Form a CorporationThe US corporation (Inc) for growth, investors and your visa.
• Form an LLCThe US LLC with a permanent establishment, turnkey in six states.
• US Bank Account OpeningYour own access to the American financial system, even without an SSN.
• Sales taxRegistration and returns in the states where you have nexus.
• Withholding taxW-8 forms, withholding and treaty benefits, done right.
• Company formation consultationEntity type, state and tax consequences, before you commit.