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Germany confirms marketplace liability for merchants’ unpaid VAT

  • Jun 26, 2018 | Richard Asquith

Germany confirms marketplace liability for merchants’ unpaid VAT

Germany yesterday published the draft Annual Tax Act 2018, which includes making online marketplaces potentially liable for merchants’ unpaid VAT liabilities. This was agreed by federal finance minister in May.

From 1 January 2019, marketplaces will be required to keep a record of German and non-German merchants' German VAT certificates. Alternatively, they may hold digital confirmation from the German federal tax authorities that the merchants are up-to-date with the German VAT affairs.

This new liability mirrors the same regulation in the UK, launched in March 2018.  France may impose similar measures soon. The European Commission has estimated that online merchant VAT fraud may by up to €5 billion per annum. It is pushing an EU-wide liability proposal on marketplaces.


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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: richard.asquith@avalara.com. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.