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Germany: Anticipated VAT legislation concerning online trading

Germany: Anticipated VAT legislation for online trading

The Council of the EU in December 2017 adopted measures intended to simplify the value added tax (VAT) system for online businesses in the EU.


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Among other things, the anticipated VAT system would—effective 1 January 2021—treat an operator of electronic marketplaces for distance sales from the EU and from third countries (e.g., business-to-consumer transactions) as if the electronic marketplace had received and delivered the goods itself, provided that the value of the consignment would not exceed €150. It would be possible, on the basis of the VAT Directive, to extend application of joint and several liability to the operator of the electronic marketplace (even before 1 January 2021). 

In Germany, the governing coalition agreement among the ruling political parties (CDU, CSU, and SPD) envisages new legislation to combat VAT fraud associated with the online trading in goods. Under this new system, operators of electronic marketplaces that fail to prevent “dishonest” traders from using their electronic marketplace would be liable for the amount of VAT evaded in such transactions. 


Other recent VAT developments that may affect businesses in Germany include the following:

  • Price discount for supplies of medicines (CJEU judgment issued 20 December 2017 in case C-462/16 – Boehringer Ingelheim Pharma)
  • Football, sightseeing tour subject to VAT (CJEU judgment issued 18 January 2018 in case C-463/16 – Stadion Amsterdam CV)
  • BFH judicial proceedings on retroactive correction of invoices (BFH cases no.: V R 48/17 and XI B 54/17)
  • VAT exemption for rental of real estate with fixtures (BMF guidance of 8 December 2017)
  • Place of supply of services in connection with real estate (BMF guidance of 5 December 2017 and of 13 February 2018)


Read a January-February 2018 report [PDF 313 KB] prepared by the KPMG member firm in Germany.

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