Germany’s tax plans includes the implementation of the EU’s VAT ecommerce package. However, it leaves in place the German marketplace VAT liability for platforms to check their EU sellers have a regular VAT registration in Germany. This is contrary to the aims of the EU VAT ecommerce package.
The ecommerce package introduces the single, pan-EU One-Stop-Shop VAT return for distance selling VAT transactions. It enables EU and non-EU sellers to avoid having to VAT register in each member state where their customers are located. Instead, for B2C distance sales, the seller can just complete in a single OSS in their country of residence (EU sellers) or nominated county.
The German marketplace VAT liability rules would mean, for example, a French seller could use the OSS return to report their German sales but would still require a German non-resident VAT registration to provide marketplaces proof of their German tax ID registration certificate from a German tax office.
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The European Commission started in October 2019 infringement proceedings against Germany for its insistence on a manual / paper-based application for the marketplace tax registration certificate.
The ecommerce package seeks to: reduce VAT registrations for distances sellers via a single OSS VAT return; withdraw the €22 VAT exemption import threshold; and introduce a new IOSS import VAT declaration. It also seeks to make marketplaces the deemed supplier and responsible for VAT obligations of their third-party sellers on certain transactions – imports not exceeding ≤150 and all non-EU sellers.
Source Credit: Avalara