German marketplaces: dealers, get a VAT certificate

Starting next week on October 1st, European based online retailers that sell to German consumers must provide any marketplaces they are active on with a German VAT certificate. They can get this certificate from the German tax office (Finanzamt).

Last week, we reported about the effects of the new German regulations for marketplaces like Amazon. The German VAT certificates should provide the marketplaces with proof of their VAT registration.

Account blocked

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.

The new regulation also takes marketplaces into account. Therefore, marketplaces operating in Germany need to hold these VAT certificates or else block the sellers who did not hand over any proof.

In Germany, Amazon and eBay have been quite clear on the matter. Sellers that haven't hand over a certificate before the deadline will see their account blocked on the first day of October.

Criteria

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