The efforts to make the collection of the value-added tax more effective are an evident tendency in all of the European Union, including Germany. The tax administrations perceive goods coming from outside Europe, mainly from Asian markets, to be a serious problem at present. These vendors often do not pay taxes, which significantly distorts the competition and, what is more, it depletes the budgets of EU countries.
Not waiting for the regulations at the EU level (there are already advanced plans in this respect), the German legislator is introducing a solution that will enter into force on 1 January 2019. It regards the closer control of sales platforms operating on online markets and the obligation for these platforms to collect tax certificates issued for vendors using online stores.
Online sales platforms allow entities from third countries to sell goods on the German market via an online store. However, persons operating these platforms will be obliged to pay a sales tax (VAT) resulting from the liabilities of a given vendor if this vendor fails to fulfil them. The operators of online stores can be exempt from this joint and several liability only if they furnish a tax certificate attesting that the vendor they provide services to is a registered taxpayer. Owing to this identification and the certificate attesting it, officials will be able to examine whether the suppliers of goods are fulfilling their tax liabilities.
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Data that needs to be collected and presented to the office, if necessary, includes the following:
- full name and address of the supplier;
- their identification number for VAT purposes;
- validity of the tax certificate;
- place of shipment commencement and destination of the goods;
- date and value of the sale/supply.
To make their life easier, the operators will have the option of making a query to the Central Federal Tax Office (Bundeszentralamt für Steuern) concerning the tax certificate of a given entity. This is of primary importance, as in the future they may be responsible for the tax liabilities of an unidentified supplier. If the entity operating an online platform completes the formalities in this respect, they will be able to free themselves from “someone else’s” liabilities for sales tax (VAT). The option of making such queries online is still in the preparation stage.
Is should be noted that it is difficult to request a tax certificate when purchasing goods or services from private persons. However, if the vendor’s activity has all the hallmarks of a business, the store operator must be aware of the fact that they will not be exempt from liability. The aforementioned regulations are not going to apply only to persons and companies from third party countries. Each and every person who wants to supply goods to the German market will be obliged to furnish a certificate of registration for tax purposes.
Vendors should register with the Central Federal Tax Office as soon as possible (if they have not already done so) and make sure they receive a tax certificate. Otherwise, the operator of an online store may refuse to cooperate with entities that do not provide them with their tax certificates, out of fear of being held responsible for someone else’s tax liabilities. Please note, however, that the registration with the Central Federal Tax Office is not synonymous with VAT registration; it is only aimed at the identification of entities that conduct sales via online platforms on the territory of Germany.
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