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Tax law: online platforms are liable for their traders

German lawmakers introduced two new Sections into the Value-Added Tax Act to curb VAT losses associated with trading via online platforms: Section 22f Value-Added Tax Act contains new obligations for operators of electronic marketplaces, Section 25e Value-Added Tax Act stipulates the marketplace operator’s liability for value-added tax not paid by the trader. As a result, since January 1, 2019, platforms such as eBay and Amazon have in principle been liable for unpaid tax from an entrepreneur’s product delivery legally established on the marketplace provided by the marketplace operator, Section 25e(1) Value-Added Tax Act new version. Correspondingly, pursuant to Section 22f(1) Value-Added Tax Act, electronic marketplace operators are obligated to record the deliveries ending or beginning in Germany of a business operating on its platform.

The new provisions are aimed at the fiscal liquidation of German VAT debts of mail order companies, frequently established in third countries (outside the EU and the EEA), but also in Germany or in Community territory, which have hitherto been less than honest relating to taxation and which elude tax registration and liability in Germany.

A. Recording obligations for electronic marketplace operators

As a matter of principle, online platform operators have to keep appropriate records (Section 22f Value-Added Tax Act) as of the Act’s entry into force on January 1, 2019. According to Section 22f(1) Value-Added Tax Act, the following data is to be recorded:

  • name, address, and
  • tax ID/VAT ID,
  • start and end date of the supplier’s tax registration certificate (not applicable to private individuals),
  • place of departure or dispatch and place of destination,
  • time and amount of sales,
  • supplier’s date of birth (applies to private individuals only).

B. Operator’s liability for violations

Tax authorities may impose coercive or administrative fines (Sections 328, 379 German Tax Code) on platform operators violating these recording and storage obligations, In addition, tax authorities may also issue a VAT liability notice to operators under Section 25e Value-Added Tax Act and estimate the seller’s sales in accordance with Section 162 Tax Code.

Electronic marketplace operators are liable for the unpaid value-added tax from the delivery of a business which has been legally established on the marketplace provided by the operator. Considering the following restrictions, this principle establishes the marketplace operator’s strict liability under tax law for all third-party deliveries via the operator’s marketplace.

The law does not require the operator to be established in Germany. Rather, the criterion of indirect tax liability applies: The online platform operator must mediate taxable deliveries in Germany via its portal. Accordingly, the mail order company’s place of registered office is legally irrelevant. Operators of websites that only mediate B2B transactions are also included.

Operators are not liable when a certificate in accordance with Section 22f(1) sentence 2 Value-Added Tax Act is submitted. Traders must apply to the competent revenue office for a tax registration certificate. This does not yet state that the trader will comply with all tax obligations. The revenue office initially issues the certificate in paper form. In the future, the Federal Central Revenue Office will store this certificate at the trader’s request and provide the operator with corresponding information by means of electronic queries. Third country traders (with the exception of EEA States) must designate an authorized recipient in Germany at the latest when submitting the application (Section 22f(1) sentences 2 - 4 Value-Added Tax Act). If, however, the marketplace operator had knowledge of the unlawful conduct of its trader or should have recognized this, the marketplace operator is liable even when submitting the certificate (Section 25e(2) sentence 2 Value-Added Tax Act).

The liability of operators (Section 25e Value-Added Tax Act), however, will not apply until March 1, 2019 for companies domiciled in third countries and until October 1, 2019 for companies domiciled in Germany or in the EU/EEA (Section 27(25) sentence 4 Value-Added Tax Act).


Nicole Wolf-Thomann

Nicole Wolf-Thomann


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Heiko Wunderlich

Heiko Wunderlich


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