Via an application, the paper document is obtained to the various German tax offices. The certificate verifies a sellers German VAT registration and the fact they are up-to-date on compliance. So far, this regulation was applied to non-EU sellers. Since the first of March 2019, these sellers have been required to provide the same certificate. In November 2018, Germany’s ‘Gesetz zur Vermeiding von Umsatzsteuerausfällen beim Handel mit Waren im Internet und zur Änderung weiterer steuerlicher Vorschriften’ was passed. This law was designed by the German government to tackle VAT fraud by online sellers across the border of the European Union.
Marketplaces are liable
The new regulation also takes marketplaces into account. Therefore, the document must be presented to any digital marketplace to ensure the right to continue to promote products on the platform. If sellers cannot provide the F22 VAT document, marketplaces will block their account. They do so as they may be held liable for any unpaid German VAT if they let sellers continue to sell their products. This started on October 1st, 2019.
The European Commission considers the German VAT certificate as a disproportionate measure. It hinders free access of EU businesses to the German market. Therefore, it would be in violation of the EU law. The EC points out the member states have agreed much more efficient anti-VAT fraud measure for 2021. Germany has two months to respond to the EC. Failure to then resolve the matter could result in a reference to the European Court of Justice.
A cross-border seller in Germany is obliged to pay VAT if he meets the following criteria:
- The company is established in Germany, e.g. as GmbH or UG
- Turnover exceeds €100.000 per year in Germany to individuals
- You ship from Germany, e.g. through a distribution partner or through Amazon FBA