The European Commission sent a formal notice to Germany as a result of its stringent requirements on online marketplaces. Businesses selling goods on digital marketplaces are currently required to obtain a paper certificate from the German Tax Authorities. The EC sent the notice on 10 October 2019.
With effect from 1 October 2019 in Germany, the online marketplaces became jointly and severally liable for the VAT due on goods being sold by third parties via its platform. This applies when the transport of the goods begins or ends in Germany. The online marketplace can avoid the liability; this is if they have a paper certificate provided by the German tax administration to business selling the goods. This means the seller has to obtain this from the tax authorities or risk not being able to sell on the online marketplace.
Consequently, the EC is of the opinion that such a measure violates EU law. They see this requirement as being an inefficient and disproportionate measure that hinders the free access of EU businesses to the single market. Moreover, it is not in line with the digital strategy that Member States agreed.
Germany has 2 months to take action to address the Commission’s concerns. If they fail to do so, the Commission will send a reasoned opinion to the German authorities.