Germany – Requirement for distance sellers to VAT register

The German Government has recently agreed to hold online market places (e.g. Amazon, Ebay) jointly liable with sellers who do not register for and pay VAT in Germany, with a new law expected to come into force in January 2019. The bill was strongly supported by the Bundesrat legislative body last week.

In order to waive their liability, market places will then have to confirm the traders’ VAT registration to the German tax authorities. This means British companies which use online market places to sell their goods in Germany will likely be affected too. 

Unregistered companies, especially from Asia, are said to cause the German tax authorities a loss in revenues amounting to hundreds of millions of Euros. The new law is expected to reduce the loss in tax revenues from e-commerce trade, an area which has been steadily growing in Germany and which has long been prone to tax evasion.

In the UK, where a similar rule has been implemented recently, Amazon is rigorously approaching online sellers and urging them to register for VAT.

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4 Eyes Ltd is the UK member of a European VAT network. Our national partner firms are able to assist with VAT registration and compliance in each EU member state. Please contact us if you require EU VAT advice.