Austria makes Amazon liable for the sellers´ VAT obligations

Over the last two years, there has been a clear trend towards extending the liability of online marketplace operators for the VAT obligations of their sellers. The EU has recently approved a pan-European set of rules making the marketplace the deemed supplier in certain circumstances. Austria has gone one step further and published specific rules making the marketplace liable for reporting and paying the VAT in Austria on behalf of the sellers.

The new Austrian rules imply that the marketplace must inform the Austrian authorities about any seller that is established outside the EU and does not have a VAT number in Austria. If the marketplace notifies this seller, they will become liable for reporting the VAT on Austrian sales by these sellers (or sellers with annual sales below EUR 100,000). This new Austrian marketplace obligation applies from 1 January 2020.

Which marketplaces are affected?

The legal definition of marketplace used by the Austrian authorities is broad. The rules will apply to any electronic market or platform that allows sellers to offer their products online to consumers and provides infrastructure for their transactions. Therefore, businesses that provide "market-making" services, such as Amazon, eBay, Alibaba, Etsy, Wish, Mercado Libre and others, should be subject to these Austrian marketplace VAT reporting obligations from 1 January 2020.

Which sellers are affected?

The rules aim to reduce VAT fraud. Therefore, they are directed at non-EU and small sellers. Specifically, the rules apply to sellers that meet the following conditions:

• The seller is established outside the EU, and
• The seller does not have a VAT number in Austria, or
• The seller's annual supplies in Austria are below EUR 100,000

What are the marketplace's obligations?

The marketplace must:

• Register for VAT in Austria (if not already registered)
• Report and pay the VAT on Austrian sales made by the affected sellers
• Inform the Austrian tax authorities about the affected sellers