Germany: Warning to online traders!

Online trading is becoming ever more of a challenge in Germany. Traders are now requested to apply for a certificate from the German tax authorities in accordance with art. 22f of the German Value Added Tax Act (UStG). Without this certificate, trading via online platforms will be impossible. Ecovis can provide you with the information you need and instruct you on how to proceed.

What is this all about?

The legal background is the 2018 Annual Tax Act. In accordance with the new regulation art. 22f UStG, operators on electronic marketplaces (e. g. Amazon) are obliged to record certain information about users of the platform (online merchants) who are liable to taxation on their sales in Germany.

What is the aim of the new law?

The goal is to enable the tax authorities to verify whether the traders in the e-commerce business sector are complying with their tax obligations in Germany.

Who is affected?

The groups affected by the new regulations are primarily operators on the electronic marketplace, but online merchants who sell goods on their own platforms are also required to co-operate by providing the marketplace operators with the corresponding data so that they can comply with their recording obligations fully. Any online merchants who do not supply the operators with the information necessary risk being excluded from the marketplace.

What needs to be done?

What is specifically required is a “certificate of registration as a taxpayer (entrepreneur) within the meaning of art. 22f (1) sentence 2 UStG”. This then serves online merchants as proof to the marketplace operator that they are registered in Germany for VAT purposes.

How and where can this certificate be obtained?

The certificate can only be issued upon application by the online merchant. He or she must actively submit an application for the certificate to the German Tax Office.

For entrepreneurs who have their domicile, registered office or management outside Germany, the competence of the tax offices varies, depending on the entrepreneur’s country of residence. The Munich tax office, for example, is responsible for entrepreneurs from Austria and Italy.

What does the application for a certificate requested under art. 22 UStG look like?

Form USt 1 TJ provided by the tax authorities can be used to make the application. The application must be submitted to the relevant tax office in writing by post or e-mail.

Critical deadlines

First of all, online merchants must observe the deadlines set by the marketplace operators in order not to run the risk of being excluded from their platforms. The German tax authorities have set the following dates for the marketplace operators for existing online merchants to obtain their certificates:

• online merchants from Germany, other EU countries, EEA states: 01.10.2019 at the latest
• online merchants from third countries: starting 01.03.2019

Since almost every online merchant will be requesting this certificate, longer processing times are also to be expected at the tax offices, so dealers should apply for this certificate as soon as possible, explain the Ecovis experts.

Here is the link to download your application for a certificate as per art. 22 sec. 1 sentence 2 UStG:
https://www.lfst-rlp.de/service/vordrucke/umsatzsteuer/sonstige

Conclusion

Dealers who are active on such online trading platforms, such as Amazon, eBay and Zalando, should apply in good time for the certificate in compliance with art. 22f UStG, the German Value Added Tax Act, otherwise it will no longer be possible for them to trade via online platforms in Germany.

Author
Monik Vent,
tax advisor,
Ecovis, Munich, Germany
Email: monik.vent@ecovis.com