Knowledge Base: E-commerce Accounting and VAT Compliance


Germany – Tax News

Date21 Nov 2017

Germany – Tax News

Decree announced for call-off stock

On the 10th October, 2017 the German Federal Ministry of Finance announced a decree to permit a VAT registration exemption for foreign companies holding call-off stock in Germany.

Goods which are held in a foreign country by a non-resident seller, but under the full control of a single customer is what’s called ‘call-off stock’. This includes the right for the customer to access the stock at will and take stock to be invoiced for later. Typically, the stock is held at the foreign customer’s premises.

This acknowledgement of ‘call-off stock’ for VAT compliance in Germany means the non-resident company is no longer required to be VAT registered in Germany, thus no requirement to charge 19% German VAT on the sale of the goods. In its place, they can report a zero-rated intra-community sale at the time of the movement of the goods to Germany.

But if the goods require to be accessed and sold to other customers, then they will be considered ‘consignment stock’, and the seller will still have to VAT register in Germany.

Germany stalls on €7 billion EU VAT e-Commerce package

On the 7th November, 2017 the monthly meeting of EU Finance Ministers, ECOFIN, could not reach agreement on a recommended €7billion VAT e-Commerce package. This involved a plan to make major international platforms (e.g. eBay and Amazon) possibly liable for VAT fraud by non-EU sellers.

This package aimed to boost Member States’ tax receipts by a projected €7 billion by streamlining VAT on cross-border sales to consumers, and reducing the opportunity for online VAT fraud. The proposals included:

  • In 2019 several simplifications to the current B2C MOSS scheme for electronic services,
  • In 2021 an extension of the MOSS ‘one-stop-shop’ to B2C e-Commerce sales,
  • Improved collaboration among tax authorities to re-enforce the above measures,
  • The withdrawal of low-value consignment stock VAT exemption on small imports.

Additionally, the European Commission suggested making the online marketplaces liable for missing VAT from fraud by non-EU – primarily Chinese – e-Commerce retailers on their platforms.

The proposal was postponed due to Member States, particularly Germany, raising concerns around the 2021 extension of the ‘one-stop-shop’. The Member States were concerned about ceding control of their tax collections to other States. Germany requested more time whilst its new government was formed.

These proposals will be discussed by ECOFIC again in December in an attempt to reach a compromise.

Germany’s Free Democratic Party (FDP) signals a compromise on tax cut stance

Germany’s FDP has signalled its intentions to negotiate on its mandate for significant tax cuts in order to smooth the path towards a coalition agreement.

They had been calling for tax cuts in the region of EUR30 billion (USD34.8 billion), but now it seems they have accepted that these demands were unacceptable to the fiscally conservative Christian Democrat Union (CDU), led by Chancellor Angela Merkel, on 7th November the FDP indicated that it was softening its stance on tax.

The FDP argued that tax cuts were long overdue amid conservative budget surpluses and record tax revenues, they had been calling for “a fundamental rethink in tax policy”.

Nevertheless, the FDP will still try to persuade the CDU to eradicate the solidarity tax, which has helped fund economic development in the east of Germany.

This coalition agreement, which is currently being negotiated between the CDU, the FDP and the Green Party, so it still remains possible that tax cuts will be included – the so-called ‘Jamaica coalition’. However, these tax cuts are likely to be closer to the EUR15 billion that the CDU proposed in its election manifesto.

amavat® provides a ‘one-stop-shop’ solution for VAT Compliance within Europe. We assist clients with a single point of contact that speaks their language and handles all VAT related issues with a standard and cost efficient approach.

If you have any queries or questions, please do not hesitate to contact amavat®.

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