Is your Online Store selling to Germany?
The e-com market in Germany
In April 2019, Handelsverband Deutschland published interesting statistics about the online store market in Germany. The market was worth 53.3 billion euros in 2018 and is expected to reach 57.8 billion euros in 2019. Are you already selling to Germany? Are you aware the newest rules and regulations with VAT?
What is happening?
On 9 November 2018, the German Parliament passed a new law making online marketplaces liable for unpaid VAT by third-party merchants on their platforms. The move follows similar legislation in the UK which came into force in March 2018. The EU is going to replicate this in January 2021.
Germany is looking to reduce hundreds of millions in lost VAT revenues, much of which are believed to originate from sellers in other countries unaware of their German VAT obligations or deliberately evading VAT. The EU estimates that member states lose a total in €5billion in e-commerce VAT fraud so it is a big problem that needs to be solved.
What does this mean for me?
The legislation will require marketplaces to confirm that merchants are German VAT registered in order to have them continue selling within Germany. If companies are not registered in Germany and cross the thresholds requiring them to register then their account will be SUSPENDED by the German government.
Non-EU sellers will have to appoint a VAT representative / agent to obtain their tax certificate. This agent must be resident in Germany or an authorised party in another EU country (such as a company like Avalara). The average time it takes for an account to be re-instated is at least 10 weeks.
Avalara can help!
OGOship's tax partner Avalara is able to get companies registered for and file VAT compliance in Germany and in all European Countries. If companies have VAT numbers and are filing returns correctly, then there will be no danger of account being shut down.
If you would like to hear more about e-com VAT or preventing your account being suspended then please contact Colin Stansbury at Avalara quoting OGOship and he will be able consult on the best ways to be compliant in Europe.
OGOship Venlo helps you reach German markets in one day!
Our new fulfillment center OGOship Venlo in Netherlands offers fast and cost effective shipments to Germany as well as the whole Central-Europe.