When selling through AWS Marketplace, multiple types of taxes may apply depending on the transaction. These taxes are influenced by several factors, including seller location, buyer location, product type, and regional tax regulations.

This article provides a general overview of how taxation works in AWS Marketplace and what sellers should expect.

AWS tax guidance is provided by Amazon Web Services and can change over time based on regulations.

Types of Taxes That May Apply in AWS Marketplace

There are several categories of taxes that may be relevant when selling through AWS Marketplace:

1. Indirect Taxes (VAT, GST, Sales Tax)

Indirect taxes are the most common taxes associated with Marketplace transactions.

These may include:

• Value Added Tax (VAT)

• Goods and Services Tax (GST)

• Sales and Use Tax

• Digital services taxes in certain jurisdictions

These taxes are typically determined based on the buyer’s location, not the seller’s location.

Who Collects Indirect Taxes?

In many jurisdictions, AWS acts as a marketplace facilitator, meaning AWS:

• Calculates applicable taxes

• Charges the buyer

• Collects the tax

• Remits the tax to the relevant authority

In these cases, sellers generally receive payouts net of AWS fees, without needing to collect indirect taxes themselves for those transactions.

However, in some jurisdictions AWS may not collect taxes, and sellers may have their own obligations.

2. Seller Income Taxes

Regardless of who collects indirect taxes, sellers are generally responsible for reporting income received from AWS Marketplace in their local jurisdiction.

This may include:

• Corporate income tax

• Business income tax

• Local income taxes

AWS does not typically withhold income taxes from seller payouts (except where legally required).

3. Withholding Taxes

For cross-border transactions, buyers may be required under local law to withhold a portion of payments and remit it to their tax authority.

This depends on:

• Buyer country regulations

• Seller tax residency

• Applicable tax treaties

If withholding tax applies:

• Buyers may request tax documentation from sellers

• Sellers may need to provide certificates of tax residency

These processes occur directly between buyer and seller, not through AWS.

4. Taxes on AWS Marketplace Fees

AWS charges sellers various fees, such as:

• Marketplace service fees

• Listing fees (if applicable)

• Private offer fees (where applicable)

Taxes may be applied to these fees depending on:

• Seller location

• AWS contracting entity

• Seller tax registration status (such as VAT ID)

AWS provides invoices for these fees through the seller account.

5. Buyer Self-Assessment (Reverse Charge)

In some business-to-business (B2B) transactions, the buyer may be responsible for self-assessing taxes instead of paying them directly to AWS or the seller.

This is commonly referred to as a reverse charge mechanism and is common in:

• Cross-border B2B SaaS transactions

• VAT-registered business purchases

Marketplace Operator and Seller Tax Grid

AWS Marketplace is operated globally by different AWS legal entities depending on:

• Buyer account location

• Product type

• Seller onboarding status (including KYC completion)

• Regional regulations

The AWS entity acting as the Marketplace Operator (MPO) is the party that:

• Contracts with the buyer

• Issues invoices

• Collects and remits indirect taxes

Understanding which entity operates your transaction is important because it affects taxation and invoicing.

Marketplace Operator Determination

Fig. 1

Notes:

1. “Seller” refers to both ISVs and CPPO resellers for CPPO Marketplace transactions.

2. Professional Services referenced are delivered remotely.

Effective 02 February 2025: AWS EMEA Sàrl (Luxembourg) facilitates Professional Services purchases from sellers who have completed KYC.

AWS Marketplace Seller Tax Grid

The Seller Tax Grid provides detailed information about Marketplace tax logic, including operator determination and regional tax handling.

Factors That Determine Tax Treatment

Tax outcomes may vary based on:

• Seller location

• Buyer location

• Product type (SaaS, AMI, container, services)

• Transaction structure (B2B vs B2C)

• AWS legal entity involved

• Seller tax registrations

Summary

Taxes in AWS Marketplace may include:

• Indirect taxes (VAT, GST, sales tax)

• Seller income taxes

• Withholding taxes

• Taxes on AWS fees

• Reverse charge obligations

In many cases, AWS — not the seller — is responsible for collecting and remitting indirect taxes.