Germany advanced legislation in August targeting VAT avoidance for goods sold through online marketplaces with German connections. The proposed bills were expected to pass parliament in late fall and take effect January 1, 2019.

Key Provisions

The legislation imposed several obligations on online marketplace operators:

• Documentation Requirements: Operators must collect and verify information about goods providers, including names, addresses, tax numbers, shipment origins/destinations, supply dates and values.

• Secondary Liability: Marketplace operators face potential VAT liability if providers fail to remit taxes, unless operators demonstrate compliance with documentation duties.

• Registration Mandate: Providers of supplies with a German online nexus – worldwide – must register with the German tax authorities to enable marketplace operators to fulfill their obligations.

• Phased Implementation: Non-EU/EEA provider accountability began March 1, 2019; EU/EEA providers followed October 1, 2019.

Implications for Central and Eastern European Businesses

CEE companies utilizing German-based marketplaces would face substantial compliance burdens exceeding typical regulatory standards. This regulatory approach signals potential future expansions across other European jurisdictions or EU-wide implementation.