Germany is undoubtedly one of the top destinations when it comes to global e-commerce expansion. However, the recent change on the German Tax Regulation has left many sellers wary and confused. To clarify the situation for online sellers, we’ve asked our trusted partner in VAT registration about what this new regulation is and what actions must be taken to maintain your good status on Amazon.de.
On the 1st January 2019, the German tax authorities made amendments to current legislation to tackle VAT fraud, which makes marketplaces jointly liable for the VAT owed by their sellers. With this, they have implemented a new solution for marketplaces to ensure their sellers are VAT compliant: the new Tax Certificate.
The Tax Certificate is different to a VAT ID. However, you can only receive a Tax Certificate – that proves compliance – if you are VAT registered in Germany and obtain a Steuernummer (local VAT ID).
From a legal tax point of view, a non-resident seller doesn’t need to be VAT registered in Germany unless they:
1. are holding stock in Germany for onward sale.
2. have crossed the distance selling threshold of €100,000 within a calendar year, including all German sales for every channel combined (e.g. Amazon, eBay, website and all other marketplaces).
However, Amazon are requiring all amazon.de sellers have a Tax Certificate if they wish to continue selling on this domain. Therefore, you must be VAT registered in Germany to continue selling. The deadline to provide a Tax Certificate to Amazon for non-EU based companies is 1st March 2019. VAT registrations typically take 8 – 10 weeks to be processed by the tax authorities in Germany, so sellers risk having their accounts suspended until a Tax Certificate is provided.
For more questioned regarding VAT registration, get in touch with our trusted partner today!
And if you’re interested in selling to Germany, check out this video and find out what the German buyers are looking for!