Germany to Hold Online Marketplaces Liable for Unpaid Merchant VAT

The new German governing coalition (CDU, CSU, and SPD) is planning legislation to make online marketplaces potentially liable for any unpaid VAT of merchants operating on their websites. If the marketplace is shown that they failed to prevent ‘dishonest’ merchants, they would be held liable for unpaid VAT.

The UK has already implemented similar laws. The Council of Europe adopted measures to make e-marketplaces jointly and severally liable for missing VAT from third countries (non-EU resident). This would come into place in January 2021 or sooner.

Richard Asquith, VP Indirect Tax at Avalara had this to say fort Lawyer Monthly:

“Germany is looking to replicate the UK’s recent success at bringing thousands of Chinese online merchants into the tax net for the first time.

The marketplaces have introduced many controls already, such as VAT number checks. But this steps up the pressure on them for more due diligence on unusual pricing.”

(Source: Alavara)