Details on the record-keeping obligation in electronic marketplaces

The Federal Ministry of Finance has regulated details of the new record-keeping obligation on electronic marketplaces, especially as far as the certificate for the tax registration of companies is concerned.

Although the unofficial Annual Tax Act 2018 contains many changes in tax law, it is named after only one of these changes: The "Act on the Avoidance of Sales Tax Shortfalls in the Trade of Goods on the Internet and on the Amendment of Other Tax Regulations" introduced a new record-keeping obligation, including liability rules, for operators of electronic marketplaces. Although the new record-keeping obligation will not come into effect until 2019, the Federal Ministry of Finance has fortunately already provided details of this obligation, i.e. in good time before the new requirements come into force.

Although the amendment primarily affects the operators of electronic marketplaces, it ultimately also has an impact on all retailers who sell their goods via Amazon & Co. This is because the law stipulates that marketplace operators can ask sellers to provide a certificate of tax registration in order to be safe from liability for VAT losses. It can therefore be assumed that the operators of the major sales platforms will soon require all sellers to submit such a certificate in order to continue selling via the platform.

Anyone who sells goods or other services on trading platforms such as Amazon and eBay is therefore best advised to have the relevant certificate issued by the tax office now so that they have it to hand when the platform operator makes the expected request. The Federal Ministry of Finance already published the form for the application form in December 2018. The form is not mandatory for the application, as long as all the information provided for is included in the application. An application by e-mail to the tax office is therefore also possible.

In the medium term, the certification procedure is to be handled completely electronically. Until such time as a corresponding procedure has been set up, the tax office will issue the certificate in paper form on a transitional basis. This certificate will then be valid until December 31, 2021 at the latest. Regardless of how many trading platforms the entrepreneur offers his goods on, he will receive only one certificate. He can then convert this into an electronic format (scan, photo, etc.) for forwarding to the platform operators.

If the certificate is lost, the tax office will issue a replacement certificate. Also, in the event that certain data changes (new address after a move), the tax office will issue a new certificate upon request. If the platform operator has reasonable doubts about the authenticity of a submitted certificate, the tax office must provide him with information about the validity of the certificate upon request.

Small entrepreneurs can also obtain a certificate from the tax office upon request. A certificate is only unnecessary if the entrepreneur does not carry out any sales subject to VAT in Germany, e.g. delivers his goods from a non-EU country. In detail, the marketplace operator must record the following information for all transactions where the movement of goods begins or ends in Germany:

• the complete Names and the complete Address of the supplying trader under which he is registered for tax in Germany or which he has indicated in the application for tax registration

• the tax certificate issued to the entrepreneur by the competent tax office Tax number

• as far as available the Value added tax identification number (VAT ID)

• Start and end date of the Validity of the tax authority issued by the competent Certificate of tax registration of the entrepreneur

• complete addresses of the Place where the movement of goods begins and the place of destination in accordance with the requirements of sales tax law

• sales tax Time of the turnover (usually the beginning of the goods movement, i.e. the date of shipment)

• Height of sales, i.e. the remuneration less rebates, discounts, etc.

Even if the vendor has registered on the marketplace not as an entrepreneur but as a private vendor, the platform operator must record this data. Instead of the tax number, he must in this case record the date of birth of the provider. All data must be stored for 10 years.

According to the requirements of the Ministry of Finance, the platform operator is liable for sales tax losses even if it should have recognized that a registration as a non-entrepreneur was wrongly made. Operators are to assume this if the seller exceeds an annual turnover of 17,500 euros (small business threshold).