Germany VAT Update

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These are the latest updates and news regarding VAT in Germany. This is a first approach to the new tax legislation which add joint liability between sellers and electronic marketplaces.

Germany passes marketplace VAT liability laws

On 9 November 2018, the German Parliament passed a new law making online marketplaces potential liable for unpaid VAT by third-party merchants on their platforms. The move follows similar legislation in the UK which came into force in March 2018. The EU is planning to replicate this in 2021.

From 2019, electronic marketplaces must hold detailed information on third-party sellers, including their German VAT transactions and a tax office certificate validating they are up-to-date on their tax affairs. The marketplace liability applies with respect to non-EU merchants from 1 March 2019, for EU-based merchants from 1 October 2019.

Marketplaces must collect seller background and transaction data.
   » The full name and address of the seller;
   » The tax number of the seller, and if appropriate the VAT ID number;
   » The start and end dates for validity of the certificate for the above; » the place where dispatch or shipping begins, and the destination; and » the date, and quantity of sales.
   » Alternatively, they can seek a digital tax certificate from the tax authorities that the seller is up-to-date with their VAT compliance. If this is not satisfied, and the marketplace continues to allow the seller to market on their platform, then it would be held liable for any unpaid VAT.
   » Non-EU sellers will have to appoint a VAT representative / agent to obtain their tax certificate. This agent must be resident in Germany or an authorized party in another EU country.

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

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