No more online sales in Germany without a tax certificate

New German VAT legislation came into force on the 1st of January 2019 for all online sellers there. This requires all businesses trading in Germany to register for a German Tax Certificate (Form F22) regardless of whether or not they are above the VAT threshold level.

Essentially this is your business registering with the German authorities that they are making sales to Customers in Germany. The German Tax Certificate is not a VAT registration and you will still need to register if the annual threshold of 100,000 Euros(€) is breached.

Amazon Germany has told FBA sellers that if they have not provided details of their German Tax Certificate before the 1st of March 2019 then they may no longer be permitted to sell on Amazon Germany until this is provided. As such if you are a Germany Amazon seller, we strongly recommend that you arrange to obtain this German Tax Certificate as soon as possible. After all, Germany is the largest e-commerce market in the EU and to temporarily be unable to sell on the platform could be a large lost sales opportunity.

It is important for e-commerce businesses to know that this is not just a requirement to sell on Amazon. You will need to apply for and provide a German Tax VAT Certificate to sell on any and every e-commerce platform in Germany. To obtain this certificate, you must submit an application to a German tax office.

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The new legislation effectively gives the German tax authorities the ability to have total visibility of online marketplace accounts. This means they can view the date you opened your account as well as your turnover.

Essentially this new legislation has been designed so the German Tax Authorities can become aware of businesses that have breached the VAT threshold limit. The reason behind this was that it was suspected that there were quite a few businesses that were breaching the limit and not registering. As they were not registered with the German authorities there was no way of keeping track of businesses that should have registered meaning that Germany was losing out on millions of Euros in sales tax each year as a result.

In order to register for a German Tax Certificate, you need to contact the German tax office which is responsible for sellers from the country your business is registered in. For UK Companies this is the Hannover-Nord tax office.

German tax authorities are expected to issue heavy penalties to those who do not abide by the change, so it is important that if you trade in Germany, you understand the requirements and your obligations in full.

If you need help getting your head around what these changes mean for your e-commerce business get in touch, or should you need any assistance with your accounting services and bookkeeping let us know and we would be happy to help.

The best time to start is now.

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Breakout E-commerce accountants and Xero specialists to supercharge your UK online business growth.