In the following article, we will show you why and by when Swiss online traders must submit an application to avoid the consequences of marketplace liability in Germany described below.
What is marketplace liability?
In Germany, it is estimated that up to one billion euro in sales tax per year is evaded in online retail via marketplaces. A law making marketplaces liable for unpaid sales tax has therefore been in force in Germany since January 1, 2019. The aim to make marketplaces responsible, as many dishonest online retailers based abroad fall outside the reach of the German tax authorities. The basics: Every electronic marketplace in Germany – e.g. Amazon.de or eBay.de – can be made liable for unpaid sales tax as of 2019 if it does not have a certificate from the respective trader that it is tax registered in Germany.
How do you get the certificate?
The certificate is colloquially called the 22f Certificate, since the procedure is regulated in Section 22f of the German VAT Act (UStG). The 22f Certificate confirms to the tax authorities that you are registered for sales tax purposes in Germany. It has been possible to apply for this from the responsible tax authority since January 1, 2019. The Constance tax office is responsible for online retailers from Switzerland who are subject to tax in Germany.
When am I liable to pay tax Germany as a Swiss online trader?
There are basically two triggers for tax obligations and the associated registration obligations in Germany.
- If, for example, you use a warehouse in Germany from which goods are delivered to end customers in Germany, you must pay tax directly in Germany. The most common use case is probably Fulfillment by Amazon (FBA) in Germany.
- If you send goods from Switzerland to German end consumers and pay the import sales tax in Germany for these end consumers, you are also liable to pay tax in Germany.
In both cases, you must apply for a German tax number at the tax office in Constance and observe the following.
What has to be done from January 1, 2019?
The marketplace liability law will not take full effect immediately. There will also be transition periods due to technical challenges for the financial administration. Retailers based in the EU and EEA countries will receive a transition period of nine months. Retailers from third countries, for example Switzerland, only receive a period of two months. This means that online traders from Switzerland should have obtained such a certificate by February 28, 2019 at the latest and sent it to the respective marketplace.
What can you do if you have not yet applied for a 22f Certificate?
You can send your application in writing by post or email to the Constance tax office. The application form (USt 1 TJ) is available via this link (German only). The certificate subsequently issued by the the tax authority is the 22f Certificate. This is done using the USt 1 TI form. You must scan this form and upload it to the German marketplaces. The form is then authenticated by the marketplace; this should be completed within a few days. According to current information, this process does not have to be repeated annually, as the certificate will be valid for all retailers until an electronic exchange procedure between tax authorities and marketplaces has been set up.
About Taxoo GmbH
In the field of e-commerce, we draw on the expertise of experts in selected areas. The author of this article, Roger Gothmann, is co-founder of Taxdoo GmbH. He worked for the German tax authorities in the area of sales tax for many years. Prior to founding Taxdoo, he was head of the tax department of an international foundation. Taxdoo GmbH is a digital solution for international sales tax.