Hi everyone,

I've been selling on the MX marketplace as a US-based company since December 2021, and up until March 2023, Amazon never charged me MX income tax. However, starting from March 2023, they started withholding 20% MX income tax. The reason behind this is that I created an FBA shipment plan in March, just to test how to send inventory to MX in case I wanted to use Amazon FBA. However, I never actually sent any inventory to MX, and I canceled the FBA shipment plan. Despite this, Amazon began treating me as if I had inventory in MX and started charging me income tax. According to the Mexican income tax withholding FAQ: "If you, your business, or both are physically located in Mexico, or if you store inventory in Mexico, or if the products you sell are shipped from and to a Mexican address, your account(s) may be subject to withholding.". None of these criteria apply to me, but because of the canceled FBA shipment plan, I'm being charged MX income tax. The FBA shipment plan triggering Amazon's algorithm falsely.

So far, the total withholding amounts to approximately $15,000 USD. Not only did I lose that money, but I also had to close my store because they withhold 20% from every sale, which is more than my profit.

I tried discussing this issue with seller support, but they have been completely unhelpful. They keep telling me that if I have an active listing in the MX marketplace, regardless of whether I have inventory there or not, I have to pay MX income tax. This is entirely incorrect. How do I know?

1. When I asked them why I didn't have any withholdings from December 2021 to March 2023, they couldn't provide a satisfactory answer. They kept sending me robotic copy-paste messages from FAQs. If what they say is true (that every seller who sells on MX pays MX income tax), then why wasn't I being charged earlier? Proof that MX-Income charges started after March is attached at the end of this message.

2. I have an Amazon account manager assigned to my account who has been very helpful at the beginning. She confirmed that her other US sellers who ship to MX do not pay MX income taxes, and she has never seen such withholdings for a US-based seller before. She opened an internal case with the tax team, and they are working on fixing the issue. She mentioned that it may take some time to resolve because they are trying to figure out why it happened and how to prevent it from happening to me or other non-ICFBA US sellers in the future.

The problem is, I've been waiting for almost 2 months now, and my total loss (including profit-loss) has exceeded approximately $23,000 USD. My manager seemed to get annoyed with my emails constantly asking for updates. The last message I received from her stated that she and her team no longer have visibility on the tax case, and I should just wait for the tax team to contact me directly once the issue is fixed. She also canceled the meetings I had scheduled.

Folks, the business that I've worked so hard to build is sinking deep into the ocean. I'm losing potential profit every day and can't pay my business credit cards because of these withholdings. Given that my manager doesn't communicate with me anymore, even though they have confirmed there is an issue that needs to be fixed, how can I reach out to higher management?

Is there anyone in forums who can hear my voice? I am desperately seeking help.

Thanks for reading,

Eren.