U.S. tax compliance for non-resident Amazon sellers is complex. Two sellers could have nearly identical business models but very different tax obligations depending on how the IRS views their U.S. business activity and how their CPA interprets tax laws.
There is no one-size-fits-all answer, but recurring misinterpretations lead non-resident sellers to overpay or underpay U.S. taxes. After working with top U.S. tax attorneys, CPAs, and my tax and legal mastermind group, I’ve compiled the most critical areas where confusion happens and where non-resident Amazon sellers make U.S. tax mistakes.
1) Thinking W-8BEN or W-8BEN-E Means No U.S. Tax Obligation
Not true. Forms W-8BEN and W-8BEN-E certify foreign status for withholding. They do not decide whether you must file a U.S. return or owe U.S. tax.
Whether you file or owe turns on facts, in this order:
USTB – U.S. Trade or Business
- Do you use U.S. space at your disposal, have a U.S. dependent agent who habitually binds orders or terms, or regularly perform core work in the U.S.?
- Guardrail: Inventory in Amazon FBA or a true 3PL by itself does not create USTB because those facilities are generally independent and not imputed as your office. Risk rises if you control space or do non-auxiliary work like returns triage or rework, or a U.S. person can bind deals.
ECI – Effectively Connected Income
Test ECI only after USTB exists.
- Resellers: source by title passage. U.S. title leads to U.S. source and ECI.
- Producers: post-TCJA, source by place of production.
- Even foreign-source sales can be ECI if attributable to a U.S. office that materially participates, including an attributed dependent agent’s home office.
Treaty Overlay
- If you are treaty-resident, business profits are generally exempt only if you have no Permanent Establishment. You must still file (1040-NR for individuals or 1120-F for foreign companies) and attach Form 8833 to claim the treaty.
- States are separate. Treaties do not bind state income or franchise tax and do not affect sales tax.
Bottom line: Submitting a W-8 to Amazon does not settle your U.S. tax obligations. Your activities do. If those activities meet a USTB gateway and your sales are ECI, you need to file and compute tax on net profit, or file with 8833 if you are claiming no-PE under a treaty.
2) Assuming No 1099-K Means the IRS Does Not Know About Your Sales
Amazon does not issue Form 1099-K to sellers who submit W-8BEN, but that does not make your sales invisible to the IRS.
Amazon still reports total marketplace sales in its corporate filings. The IRS can also cross-check:
- Customs import records
- Amazon internal sales data
- International wire transfers to foreign bank accounts
If you think you are off the radar because Amazon did not issue 1099-K, think again.
3) Filing 1040-NR + Form 8833 to Claim “No Permanent Establishment”
What most miss
- A tax treaty’s PE rules apply to the enterprise of a treaty resident. That can be a foreign individual or a foreign company.
- If a U.S. single-member LLC is disregarded, the owner is the taxpayer for treaty purposes:
- Foreign individual owner files 1040-NR.
- Foreign corporate owner files 1120-F.
The correct order — do not skip steps
- USTB (domestic law): decide first whether you have a U.S. trade or business. If no USTB, you generally do not have ECI and do not need 8833 for business profits.
- ECI/Source: if USTB exists, apply sourcing rules for resellers and producers, and consider possible U.S. office attribution.
- Treaty PE: if treaty-resident and no PE, and you meet LOB, you may claim exemption for business profits by filing and attaching Form 8833 with your 1040-NR or 1120-F.
When not to attach 8833
- Do not file 8833 unless you are taking a treaty-based return position such as “USTB but no PE.”
- If you truly conclude no USTB, you generally do not take a treaty position at all. Many advisors still file a protective 1040-NR or 1120-F to preserve deductions and start the statute, but without 8833.
If you misuse it
- Filing 8833 for a non-existent treaty claim or filing late can lead to denial of the position, back tax, penalties, and interest.
- Missing a timely return can cost you deductions (corps: §882(c)(2); individuals: Reg. §1.874-1), turning a profit tax into a near gross-receipts assessment.
4) Believing No U.S. Office Means No U.S. Tax Obligation
You can have USTB without leasing an office if either of these is true:
- A U.S. dependent agent habitually binds orders, prices, or credits for you.
- You or your staff regularly perform core work in the U.S. through recurring in-person services.
Guardrail: Inventory in Amazon FBA or a true 3PL by itself does not create USTB. Risk rises if you control space like returns or kitting, or a U.S. person has authority to bind terms.
Then test ECI
- Resellers: title-pass decides source. U.S. title leads to U.S. source and ECI.
- Producers: source by place of production.
- Foreign-source sales can still be ECI if attributable to a U.S. office that materially participates, including an attributed dependent agent’s home office.
Treaty overlay
If you are treaty-resident, business profits are typically exempt only if you have no PE, and you must file and attach Form 8833 to claim it. States are not bound by treaties.
Bottom line: No lease does not automatically mean no U.S. tax. The IRS looks at how you operate. If your facts are close to the line, especially with FBA or 3PL, get a second opinion from a tax professional who understands marketplace logistics and USTB/ECI rules.
5) Working With a CPA Who Does Not Specialize in Non-Resident E-commerce Taxation
U.S. tax exposure turns on a fact-driven three-step analysis — USTB, then ECI/Source, then Treaty/PE — and practitioner interpretations can diverge.
Common missteps to watch for:
- Misapplying treaty PE rules or forgetting that a disregarded SMLLC’s owner is the treaty enterprise.
- Assuming FBA inventory automatically creates or never creates USTB/ECI instead of testing fixed place, dependent agent, and personal services first.
- Skipping the order or forgetting Form 8833 when actually claiming no-PE.
- Ignoring attribution from a U.S. office or dependent agent’s home office.
- Conflating W-8 and W-9 with taxability. They are withholding forms, not USTB/ECI determinations.
- Forgetting that treaties do not bind state income, franchise, or sales tax rules.
Why some CPAs still suggest filing when you conclude no USTB: to start the statute of limitations, preserve deductions if the IRS later asserts USTB, and reduce notice risk from EIN, 1099-K, and platform matching. Attach Form 8833 only if you are actually taking a treaty no-PE position.
6) Getting the “Dependent Agent” Rule Right (Domestic vs Treaty)
Two systems use the concept
- Domestic law (USTB): you can be engaged in a U.S. trade or business if a U.S. person habitually concludes or binds contracts or grants concessions for you. You do not need your own leased office.
- Treaty law (PE/DAPE): a PE arises when that U.S. person habitually concludes contracts, or plays the principal role under many treaties.
For a U.S. disregarded SMLLC, the owner — foreign individual or foreign company — is the treaty enterprise. The DAPE/PE test applies to the owner, not the disregarded label.
Guardrails
- Inventory at Amazon FBA or a true 3PL alone does not automatically create USTB or ECI.
- ECI requires USTB first. After USTB, apply source rules:
- Resellers: title-pass decides U.S. or foreign source.
- Producers: place of production.
- Foreign-source sales can still be ECI if attributable to a U.S. office that materially participates, including a dependent agent’s home office imputed as your office.
Final Thoughts
U.S. tax compliance for non-resident Amazon sellers is not black-and-white. Two sellers can run the same model and reach different conclusions based on their CPA’s interpretation, their risk tolerance, and how they structure U.S. filings.
If you sell on Amazon through a U.S. LLC or foreign company and are unsure about your tax position, get a second opinion before filing.
*Many non-resident “new to brand” sellers struggle to launch a U.S.-LLC Amazon account with a U.S. address if they live and run the business from another country. Unless you can document a real U.S. operational presence, not a virtual or CMRA mailbox, SIV will flag inconsistencies and the account may stall during KYC. In many cases it is cleaner to register as a non-U.S. seller with your home-country entity, or to build the U.S. substance before applying with a U.S. LLC.
Disclaimer
This post is for informational purposes only and is not tax or legal advice. Every business is unique. If you are serious about protecting profits and staying compliant, get the right tax strategy in place before the IRS makes that decision for you.
