NEWS: Amazon Sellers may Need to Register for German VAT
Amendments to existing German VAT legislation will become effective on January 1, 2019.
As a result, you may no longer be able to sell on Amazon from March 1, 2019 if you have not obtained and provided a copy of your German Tax certificate.
It’s a requirement to be tax-registered with the German tax office in order to receive a Tax Certificate.
The best way to prepare and ensure your Amazon account is not suspended now is to verify your VAT status in Germany. If you are not yet tax-registered in Germany, we recommend that you get in touch and we can help you find out if you are obligated to register.
The German Tax authorities have stated that if you do not have any VAT obligations in Germany (you do not hold stock, or you have not exceeded the distance selling threshold) you do not need to have a VAT registration and therefore should not need to have this new certificate.
This is a result of legislation which has been approved by Germany’s cabinet, introducing new requirements for online marketplaces to collect information on traders using their platform that supply goods or services to German consumers for VAT enforcement purposed from January 2019.
The new legislation could also see marketplaces such as Amazon becoming liable for unpaid VAT if they do no not take the appropriate steps.
Furthermore, there are new rules for e-commerce that will come into force into January 2021, paving the way for a smooth transition to the new VAT rules for e-commerce.
This is part of an overall plan to fight against tax fraud and to ease administrative burdens for businesses selling goods online.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said:
“The EU is gearing up for a brand-new VAT system in 2021 to make it easier for companies to sell goods online and for Member States to recoup lost VAT revenues. Today’s proposals will allow online businesses to flourish while ensuring non-compliant businesses or fraudsters cannot undercut them. For this to happen, it is crucial that online marketplaces play their part.“
From 2021, large online marketplaces will become responsible for ensuring that VAT is collected on sales of goods by non-EU companies to EU consumers taking place on their platforms.
Furthermore, the new rules will ensure that goods sold from storage facilities (fulfilment centres) within the EU will have the correct amount of VAT charged.
Under the existing UK Fulfilment House Due Diligence Scheme, UK fulfilment centres who store goods in the UK for sellers based outside of the EU, must register for the scheme and verify overseas sellers VAT registration numbers. This is another method to curb VAT fraud by overseas sellers in Europe.
Further information will be updated accordingly.