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Because of a new German law, global brands selling in Germany on marketplaces such as Amazon, Real and eBay must have taken action by Oct. 1, 2019. Those who are not on time will be blocked. Amazon is the most important marketplace for global brands to sell in Germany. According to the "Online Monitor 2018" of Handelsverbandes Deutschland (HDE), 46 percent of German e-commerce sales are now generated by Amazon.
By: Joyce Bijlholt, Business Development Advisor Dexport
In 2017, the European Commission proposed new EU rules on VAT. According to this proposal, as of 2021, all European online stores must start paying sales tax in the member state where their buyer comes from. Now, the member state of the seller is retained. The tax authorities will have to implement the international VAT remittance.
Germany is ahead of Brussels' plans. In November 2018, the 'Gesetz zur Vermeidung von Umsatzsteuerausfällen beim Handel mit Waren im Internet und zur Änderung weiterer steuerlicher Vorschriften' was passed in Germany. Translated, this is the "Act on the Avoidance of VAT Wrong Payments when Trading with Goods on the Internet and for Amendments to Further Tax Regulations. The law is an important tool in the German government's fight against VAT fraud by online sellers from outside the EU.
Marketplaces are required by this law to act as guarantors for their platform sellers who do not pay sales tax. Marketplaces such as Ebay and Amazon therefore require their VAT-paying sellers to submit a certificate before October 1, 2019: the "Bescheinigungen nach § 22f UStG. This confirms that the seller is registered in a German VAT register. This certificate is only issued at the request of the entrepreneur and must be requested from a German tax office (Finanzamt). Marketplace sellers who are not subject to VAT must submit their own declaration to the marketplace by October 1, 2019 that they do not need a certificate. Sellers who do not yet have this in order may not sell through marketplaces in Germany until then.
When are you liable for VAT in Germany?
- Your company is based in Germany, for example as a GmbH or UG;
- You sell a total of more than 100,000 euros per year in Germany to individuals;
- You ship products from Germany, through a distribution partner or through Amazon FBA.
Traders can contact Dexport for support in applying for the German VAT number.
