New German Tax Legislation

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These are the latest updates and news regarding VAT in Germany. In this post we talk about the new German Tax Legislation and the Joint Liability of Marketplaces (such us Amazon, eBay and others) ans its sellers for unpaid VAT.

As of 1st of January 2019, the German government has adopted a new piece of tax legislation imposing a joint tax liability on the electronic marketplaces, such as Amazon, eBay and others.
Under this measure, from 1st March 2019, electronic marketplaces may be held liable and may need to assume tax liability for the fiscal debts of their non-EU sellers.
The respective potential liability for EU and European Economic Area (EEA) sellers will be applicable from 1st October 2019.
However, new book-keeping requirements will be effective from 1st January 2019.

New book-keeping requirements
Starting 1st January 2019, taxable persons will have the obligation to keep and record all details of the transactions conducted via any marketplace, where the transport of goods either starts or ends in Germany.
The following details of the transaction need to be recorded accordingly:
1) Complete name and address of the supplying taxable person
2) Tax registration number of the supplying taxable person and, if given, VAT registration number
3) Start and end date of the certificate of registration for tax purposes of the supplying taxable person
4) Places where the transport starts and ends
5) Time and amount of the transaction

Joint liability of marketplaces and the implication for sellers
The new rule establishes tax liability of electronic marketplace providers for the unpaid German VAT amounts.

For Sellers
– EU/EEA Sellers will be held jointly liable starting 1st October 2019
– Non-EU Sellers will be held jointly liable starting 1st March 2019
– All Sellers need to apply for the
   Certificate of registration for tax purposes
• It is a certificate of Compliance
• Sellers need to apply for it in the respective Finanzamt (German tax authority)
• Its validity is limited to a maximum of three years
• Sellers established outside EU/EEA must appoint a representative, dealing with their tax matters in the territory of Germany. Otherwise the certificate will not be issued
The certificate will be issued in paper form to the seller and, as for Amazon respects, they will request this certificate from all non-EU Sellers, in order to continue using their marketplace. The deadline for this presentation will be 1st March 2019.

For Electronic marketplace providers
In order to prevent the liability, providers may use sellers’ Certificate of registration for tax purposes (mentioned above) however it is still not a safe harbour at any time.
The provider of an electronic marketplace must therefore prove that they did not know nor should have known – according to the standard of a reasonable merchant and in a non-specified way – that the seller was in breach of their obligations.

As always we will keep you updated in VAT updates and news around the world.

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