Sellers operating on marketplaces must calculate taxes on the full amount received from each sale, not just what is paid out after commissions. This principle is emphasized by tax experts who explain that the revenue base for tax purposes reflects the total money transferred to the seller by the marketplace, regardless of any fees or deductions. In practice, this means that the entire sale value is considered income for tax calculations, even when a portion is withheld by the platform as commission or other charges.
For illustration, if a marketplace collects 100 thousand rubles from the sale of a seller’s goods and later transfers 70 thousand rubles to the seller after deducting commissions and expenses, the tax base remains 100 thousand rubles. The same approach applies under simplified taxation regimes, such as an income minus expenses framework, where the key requirement is to report the full marketplace proceeds before accounting for platform charges.
When using a simplified tax system, it is essential to show the entire amount received by the marketplace from end buyers in the income section. Only after that should the expenses section reflect commissions and other payments to the platform in line with the specific expense items allowed under the regime. Treating the site’s gross receipts as income, rather than the net amounts received, is a common but serious error that can trigger penalties.
A separate mistake often seen is attempting to account for when expenses are incurred in advance. For example, a platform may withhold a commission at the time of sale, but the seller has not yet issued the relevant title or included this amount in the agency’s reporting. Without this documentation, deducting such expenses becomes improper and may invite scrutiny from tax authorities.
Tax authorities routinely view these misclassifications as under-declaration of income. In many cases, audits result in fines proportional to the unpaid tax, ranging from a portion of the tax owed to more substantial penalties. The stated range commonly cited by tax professionals is a 20 to 40 percent penalty on the amount of tax that remains unpaid after the audit finds the discrepancy. In cases where violations are systemic and recur over time, there is a risk of more severe consequences, up to criminal liability in extreme circumstances, depending on the jurisdiction and the specifics of the conduct.
To reduce exposure to penalties, sellers should maintain clear, auditable records of all marketplace transactions. This includes the full sale price received, the exact commissions charged by the marketplace, and any other deductions that affect the net income reported. Clear documentation supports accurate reporting under both standard and simplified tax regimes and helps demonstrate compliance during an audit. It is advisable for marketplace sellers to align their accounting practices with the guidance provided by tax authorities and professional advisors to ensure their reported income accurately reflects the true proceeds from each sale.
In addition to general tracking, sellers should verify whether any platform-specific reporting requirements apply in their country or state. Different tax regimes may have unique rules about when revenue is recognized, how expenses are documented, and which deductions are permissible. Keeping abreast of these rules reduces the risk of inadvertent misreporting and helps maintain good standing with tax authorities over time.
Ultimately, the key takeaway is that gross revenue from marketplace sales should be treated as the taxable base, with platform commissions and other fees recorded as expenses only after the income is properly reported. This approach minimizes the chances of misstatements and penalties, and it supports a transparent, compliant tax process that stands up to scrutiny during audits. Marketers and sellers benefit from adopting meticulous record-keeping and seeking timely guidance from qualified tax professionals when necessary. The aim is to ensure that every sale is accurately reflected in the tax return, reflecting the true financial activity from the marketplace to the seller.
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