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Funds of European Amazon sellers wrongly frozen

Amazon recently halted the funds of genuine sales partners, but the company has admitted to making errors. Although the blockade is in the process of being lifted, sellers still encounter ongoing issues. In compliance with European regulations, Amazon is required to guarantee the absence of unjust traders on its platforms. Similarly, other marketplace providers are obligated to thwart sellers, such as those attempting to evade value-added tax (VAT).

Amazon Problems: Funds of European Amazon sellers wrongly frozen

Suspension of funds

Under the guise of a dragnet investigation, Amazon seems to have executed a sweeping examination across its European marketplaces. In this undertaking, the American company identified numerous retailers failing to comply with VAT regulations and subsequently suspended their funds. This approach shields Amazon from having to cover the taxes on behalf of sellers, as tax authorities typically seek the unpaid VAT from the marketplace operator if a seller is not properly registered.

Unjustified Restrictions

Despite its flaws, the dragnet investigation had significant repercussions. According to reports from German media, credits belonging to numerous honest European traders were affected. Amazon, without explicitly acknowledging fault, has initiated communication with the impacted sellers since Tuesday evening.
 The main message:

"We have decided to lift the disbursement hold put on the funds available on your seller account."

This marks the inaugural instance of Amazon lifting such a self-imposed blockade. For numerous affected sellers, this communication serves as a resolution to a week filled with uncertainty. The primary grievance revolves around Amazon's perceived lack of effective communication during this period. Nonetheless, forum discussions suggest that some sellers also express concerns about the situation.

European VAT rules

The responsibility of online marketplaces for unpaid value-added tax has, in the past, resulted in the justified removal of numerous retailers lacking a valid VAT number from platforms like Amazon. However, the application of these measures has presented practical challenges, even for a tech giant such as Amazon. Indirectly, sales partners find themselves as collateral damage of the stringent requirements imposed by Brussels.