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A Breach of EU Law Concerning the German Legislation on Online Marketplace Liability?

By Brigitte Jakoby, Jakoby Dr Baumhof

The European Commission has initiated formal infringement proceedings against Germany regarding the new German legislation on the liability for operators of online marketplaces on 10 October 2019. The new rules came into force on 01 January 2019.

Under sec. 25e para. 1 of the German VAT Act, an operator of an online marketplace is liable for VAT if an online merchant carries out taxable supplies of goods on his online marketplace without paying VAT in Germany. The liability can be prevented according to sec. 22f para. 1 German VAT Act if the operator can prove that the online merchant in question is registered for VAT purposes in Germany. On request of the online merchant, a VAT registration certificate is issued by the German tax authorities which the operator needs at the time of the delivery of goods. At the moment, the certificate is only available in printed form, an application in electronic form is not yet implemented. In the opinion of the EU Commission, the two abovementioned rules infringe EU law. This arises from the obligation of the online marketplace operator to be able to submit the registration certificate of the online merchant.

The Commission considers the connected duties as disproportionate and ineffcient. In the judgement of the EU Commission this obligation hinders the free access of European online merchants to the German market.

In addition, the EU member states have already agreed on more effective methods to prevent VAT fraud, which will come into force 01 January 2021. According to the new sec. 14a para. 2 of the VAT Directive, a supply chain similar to a commission trading scheme will be assumed when an intra-community supply of goods takes place.

In conclusion, the German obligations for the online marketplace operator go far beyond what the EU rules require and hinder the free circulation of goods.

Brigitte Jakoby

Brigitte Jakoby

GGI member firm
Jakoby Dr Baumhof - Wirtschaftsprüfer Steuerberater Rechtsanwälte
Advisory, Auditing & Accounting, Corporate Finance, Law Firm Services, Tax
Rothenburg o.d.T., Ebersberg, Germany
T: +49 9861 9405 0
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Jakoby Dr Baumhof - Wirtschaftsprüfer Steuerberater Rechtsanwälte is a mediumsized interdisciplinary company located in the south of Germany, with offices in Rothenburg o.d. Tauber, located in Northern Bavaria, and Ebersberg, near Munich.

In 1987, Brigitte Jakoby started collaborating with her husband Eugen Jakoby, also a German Chartered Accountant and German Certified Tax Advisor. Since 1996, she has been one of the Senior Partners at Jakoby Dr. Baumhof.

Published: Indirect Taxes Newsletter, No. 10 Spring 2020 l Photo: bilderstoeckchen -


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