Germany asked to cancel VAT obligations on online marketplaces
The EU Commission asked Germany to withdraw its latest VAT initiative on online platforms on the grounds of freedom of establishment in the European Union.
Germany has been asked by the European Commission to cancel its latest tax initiative on online marketplaces.
Background
To avoid VAT fraud in the online selling industry, Germany extended the VAT obligations of online sellers to the platforms used by these sellers to carry on their activity. In practice, this meant that platforms like Amazon, Ebay or Alibaba would become liable if their sellers did not provide a tax certificate called 22F (Sec. 22f UStG)
Last 1 October was the deadline to provide the 22F certificate. As a consequence , thousands of sellers who did not provide that certificate got their German account cancelled in the relevant platform.
Reasoned opinion by the European Commission
On 10 October 2019, the EU Commission sent Germany a letter of formal notice to withdraw the legislation on extended obligations to online platforms. The commission explains that such legislation prevents non-German EU businesses to access the German market in violation of EU law.
The Commission also argues that the expected 2021 changes already have in place measures to improve VAT collection on e-commerce and cut down VAT fraud.
More information is published in the website of the European Commission.
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