As all of you ecommerce sellers will know, Brexit has made fulfilling orders between the UK and the EU extremely difficult. Even Amazon sellers have not escaped the negative implications of increased border control, as Amazon have stopped pan-EU fulfilment for deliveries between the UK and the EU, forcing many sellers to split their inventories. Perhaps the most notable new obligation that has been placed on sellers is the requirement to register for VAT in EU countries where they make sales and, considering that Germany has the second biggest ecommerce economy in Europe after the UK, it is perhaps no surprise that this is the country most UK sellers are attempting to register for. If you find yourself in this particular situation, there is bad news and good news; the bad news is that German VAT registration is notoriously difficult and has more requirements for ecommerce sellers than most other EU countries. However, the good news is that we at J&P are here to help. This article will give you all the information you need to expand your business into Germany.
Firstly, Why Register For VAT In Germany?
Since Brexit, Germany certainly seems to be the most popular destination for UK sellers to register for VAT in Europe and it’s easy to see why. As previously mentioned, Germany currently has the second biggest ecommerce economy in Europe, estimated to be worth roughly €80 billion – a figure which is expected to rise to around €140 billion by 2024.
Another benefit is Germany’s central location. If you wanted to expand your business in the future to other European countries, Germany is very conveniently located in the heart of Europe so the distribution of your products would be made easier.
When And How You Will Need To Register For German VAT
If you are a seller based in the EU you’re in luck as you will only have to register for German VAT if your sales exceed the distance selling threshold of €100,000. However, if you are a seller from the UK or anywhere else outside of the EU, you will have to register for German VAT if you want to make any sales to consumers located in Germany or if you want to hold stock in the country. For you Amazon sellers, please note this also includes holding stock in an FBA warehouse.
It is vital to employ the help of experienced tax experts when applying for German VAT Registration, such as ourselves here at J&P, as the registration process is renowned for being scrupulous. In terms of the application itself, you will need to submit an application to the German tax authorities along with the relevant company documentation (founding certificates of the company, planned business activities in Germany etc).
Furthermore, the application and your documentation, as well as all correspondence with the German tax authorities, must be conducted in the German language. Applications are often returned for mistakes. Whilst you will need a tax agent for the registration, you do not need to appoint a tax representative in Germany (for clarification on the difference between the two, please see our article on the topic here).
The Additional Requirement For Amazon Sellers – F22 Certificate
If you use a facilitating online marketplace to make sales in Germany, such as Amazon, you will have to acquire a F22 certificate. This certificate essentially just confirms that you are VAT registered, and you will have to show it to the online marketplace that is facilitating your sales.
This is a tax obligation that sellers can sometimes overlook, but it is vital you acquire one before selling in Germany as you will likely face penalties if you do not have one. Luckily, when you enlist J&P’s help you with German VAT registration, we will automatically include the acquisition of this certificate for you in our service, free of charge.
Conclusion
Evidently, VAT registration is an unavoidable step when it comes to expanding your business. Whilst it can be a stressful registration process, we are here to complete the process for you.
Our long history of working with ecommerce sellers, especially those who use Amazon and eBay, means we can guide you through every step of the registration process – so please do not hesitate to send us an e-mail at enquiries@jpaccountant.com or contact us through social media to receive a quote today. In addition, we would be more than happy to help you register for UK & EU VAT and file your UK & EU VAT returns, and help you comply with VAT in case your account faces any issues.
