Online retailers

Specific obligations on taxation of online retailers from 1 January 2019

Since 1 January 2019, special obligations have applied to operators of an electronic marketplace such as Amazon, Ebay, About You etc., which primarily affect companies located in third countries that have not yet registered for tax purposes in Germany. The new regulation comprises two core elements:

  • All operators of electronic marketplaces are obliged to record certain data on sellers, including name, full address, tax number, shipping and delivery address, time and amount of turnover.
  • Operators will be liable for unpaid taxes on supplies legally justified through their own electronic marketplace. They can be exempted from this if they fulfil certain recording obligations or exclude dishonest traders from their marketplace.

The operator of the electronic marketplace must provide proof of the details of the sellers by means of a valid certificate from the competent tax office at the time of the respective delivery confirming the tax registration of the supplier. Tax registration within the meaning of this regulation means that a certificate must be issued to the affected seller. The certificate serves as proof to the marketplace operator that the entrepreneur is registered for tax purposes. The assessment of the reliability for turnover tax purposes is not part of this certificate. Existing indications that the applicant does not fulfil his VAT obligations or does not fulfil them to a significant extent are therefore irrelevant. Upon application, small entrepreneurs also receive a certificate from the responsible tax office confirming their tax registration.

Until now it was unclear what the sellers should submit whose turnover in the EU is not taxable at all. The tax offices have not issued certificates to these sellers. In addition, the German Federal Ministry of Finance (BMF) has only recently published BMF guidelines (ür-umsatzsteuerbeim-handel-wit-waren im-internet.html) and stated that the delivery of a suitable explanation by the affected entrepreneur is sufficient. It concerns for example the following cases:

  1. traders who only carry out deliveries below the delivery threshold in the Community.

    In these cases, the operator of an electronic marketplace should either record the VAT identification number issued to the supplier as proof of tax registration or otherwise prove in an appropriate manner that the supplies carried out by the supplier are not taxable domestically. (e.g. by submitting a corresponding declaration by the entrepreneur concerned). Upon application, however, a certificate will also be issued in these cases if the entrepreneur is registered for tax in Germany.
  2. entrepreneurs who exclusively make direct sales (i.e. deliveries to domestic customers for whom transport or dispatch begins after conclusion of the sales contract in the third country and for whom there is no tax liability or obligation to register for tax in Germany).

    In these cases too, the operator of the electronic marketplace must provide appropriate proof (e.g. by submitting a corresponding declaration by the entrepreneur concerned).

Therefore, the operators of the marketplace will obtain appropriate declarations.

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