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Amazon bans thousands of sellers over UK tax evasion

Amazon.com Inc. has banned thousands of seller accounts for not paying value-added tax in the U.K., The Times (London) reported June 16.

Tens of thousands of products reportedly became unavailable on Amazon's platform over a 48-hour span as a result of their vendors, which were mainly based in China, getting blocked.

The Seattle-based e-commerce giant's move is under an agreement made this year with Her Majesty's Revenue and Customs, or HMRC, in the U.K., through which online marketplaces such as Amazon and eBay Inc. voluntarily provide data and shut down sellers that were not paying value-added tax, or VAT, on products sold to British shoppers.

Meanwhile, China's Alibaba Group Holding Ltd. has opted against joining the agreement, which is part of a U.K. government crackdown on tax fraud by overseas companies, according to the report. It cited data from the British National Audit Office that said up to £1.5 billion was lost to VAT fraud in 2017, with HMRC attributing an estimated 60% of such activity to non-EU sellers, mostly Chinese.

Amazon confirmed its seller bans to The Times, also telling the newspaper that they could be lifted following VAT compliance.