German tax authority fights VAT fraud caused by non‐registered e‐commerce traders

2 January 2019

As of 1 January 2019, e‐commerce traders must get in touch with their contract partners operating the electronic marketplace, the trader is using to sell his products.
From now on, the marketplace operator is liable for unpaid German VAT caused by sales of e‐commerce traders who did not register for VAT in Germany. The operator must collect a couple of pieces of information (which needs to be available from up to 10 years back) about each e‐commerce trader using his marketplace to avoid this new liability:

  • Full name and address details of each e‐commerce trader
  • The tax number and the German EU VAT registration number issued to the e‐commerce trader
  • Dates of the certificate the e‐commerce trader must apply for with the German authorities: date, when validity of the certificate begins and ends
  • Place, where the transportation of the e‐commerce trader’s goods start and end as far as sold via the specific marketplace
  • The point of time and amount of turnover of the sales via the specific marketplace
  • Amount of turnover
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The trader’s certificate will be valid for 3 years maximum and will be issued from ‘his’ tax office in charge for the e‐commerce trader. If the trader is situated outside the EU, the trader must appoint an authorised agent in Germany (e.g. the member firms of HLB Germany). The German legislation has provided a special form to be issued from the competent tax office of the trader (must be used until an electronic process will be established).

To avoid this liability, the operator must be in the position to present the above mentioned data starting from 1 March 2019 for traders situated outside the EU. For traders situated in the EU resp. the EWR/EEA a 1 October 2019 deadline applies.

We strongly recommend you apply for the certificate as soon as possible, because it’s expected that tax authorities will not be able to issue the certificate at short notice due to the large number of applications.

No certificate is necessary (but possible, if a German tax number for other reasons exist) if the trader only conducts distance selling sales to private individuals not leading to a German VAT registration, meaning if sales do not exceed the distance selling threshold. In this case, the trader must confirm with the marketplace operator that the threshold is not exceeded.

A certificate is also not necessary for non‐EU traders doing direct sales without being liable to register in Germany (e.g. if the recipient of the sale does the importation). Again, a written confirmation may be requested from the marketplace operator.

We advise to have a detailed check-up to avoid any compliance issues and worst case, sales being put on-hold by the marketplace operator. For more information or support from a German tax advisor, please get in touch.

Author: Lutz Meyer, HLB Indirect Tax Services Leader and partner at HLB Treuhand Weser‐Ems GmbH

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