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25/07/2024

2024 VAT Guide for Online Sellers on Amazon and eBay in Germany

When online retailers sell goods via platforms like Amazon or eBay in Germany, understanding VAT obligations is crucial. The VAT regulations vary depending on where the goods are dispatched from and where they are delivered. Below is a breakdown of the VAT requirements based on different sales scenarios and guidelines for VAT registration for foreign sellers.

Sales from German Warehouse

Domestic Sales (Germany to Germany): When goods are sold and dispatched within Germany, they are subject to the standard German VAT rate of 19%. Sellers must register for VAT in Germany and charge VAT on these sales.

Intra-EU Sales (Germany to other EU countries): For sales from Germany to customers in other EU countries, the VAT treatment depends on the customer’s location and the seller’s total sales to the EU:

  • If annual sales to all EU countries exceed €10,000, the seller must charge VAT at the rate applicable in the customer’s country. Sellers can use the One-Stop-Shop (OSS) system to simplify this process by registering for VAT in one EU country and declaring all EU sales through a single return.
  • If sales do not exceed the €10,000 threshold, German VAT can be charged.

Sales to Non-EU Countries (Germany to Switzerland, Norway, etc.): Sales to customers outside the EU are generally zero-rated for VAT purposes. This means no VAT is charged on the sales invoice, but sellers must maintain proper export documentation to prove that the goods left the EU.

Sales from Warehouses Outside Germany

Sales from Other EU Countries to Germany: If an online seller stores goods in another EU country (e.g., Poland) and sells them to German customers, the same €10,000 threshold applies. If sales exceed this threshold, German VAT must be charged, and the seller can utilize the OSS scheme to streamline VAT reporting.

Sales from Non-EU Countries to Germany: For goods dispatched from non-EU countries (e.g., China), the marketplace operator (Amazon, eBay) often becomes the “deemed supplier” responsible for collecting and remitting German VAT on sales valued up to €150. For goods exceeding this value, the seller must ensure VAT compliance, typically involving import VAT and duties.

VAT Registration Requirements for Foreign Sellers

Foreign sellers must register for VAT in Germany in several scenarios:

  • They store goods in Germany or another EU country.
  • Their sales to German consumers exceed the distance selling threshold of €100,000 annually (prior to the OSS threshold reduction to €10,000).
  • They sell goods valued over €150 from non-EU countries directly to German customers.

Foreign businesses may need to appoint a local VAT representative, especially if they are based outside the EU. This representative handles VAT registration and compliance on behalf of the seller.

Platform Liability and Compliance

Platforms like Amazon and eBay are liable for ensuring VAT compliance for sales made through their sites. They must collect and remit VAT for certain transactions, particularly those involving non-EU sellers or low-value consignments. Non-compliance can result in seller account suspensions or bans, as platforms are obligated to block merchants who do not provide the necessary VAT documentation.

Filing VAT Returns

VAT returns in Germany can be submitted electronically through the Federal Central Tax Office (BZSt) or using the OSS system for cross-border EU sales. Sellers must file regular VAT returns detailing their sales and VAT collected. The frequency of these returns can be monthly, quarterly, or annually, depending on the seller’s turnover.

Conclusion

Navigating VAT obligations for online sales in Germany requires careful consideration of the sales channels, goods’ origin, and destination. Utilizing the OSS system, understanding platform liabilities, and ensuring proper VAT registration are critical steps for compliance and avoiding potential penalties.

For further assistance and queries, please contact us at WW+KN, a Baker Tilly Company, via email at info@vat-germany.com.