As of next spring, German individuals who engage in significant trading on platforms may face scrutiny from tax authorities. It is a results of the brand new European Platform Tax Transparency Act.
The Brussels-based law establishes comprehensive reporting obligations for digital platforms to combat tax evasion and forestall black market trading. While the principles ultimately apply to all European Union member states, the national implementation of the act varies in progress.
Scope
In Germany, lively private platform traders, for instance, on Amazon, eBay, Etsy, and Vinted, may turn into the goal of tax investigators in the event that they trade greater than thirty products annually on a platform or generate over two thousand euros in revenue. Marketplace trading is very talked-about in Germany, with Amazon because the undisputed market leader.
Reporting requirement
Large private platform sellers will in a roundabout way face the tax authorities but will probably be not directly involved: it’s the responsibility of the operators to share relevant data. The central German tax authority recently prolonged the deadline for this: initially, they’d until January 31 to offer the requested information for the tax 12 months 2023, however the platforms have now been given an extension until March 31.
The reporting deadline has been shifted to March 31.
The platforms are also scrutinized using spider software, as reported by the German digital news platform T3n. If officials discover suspicious transactions, operators must provide details about individual platform sellers, including names, birthdates, addresses, tax identification numbers, and bank details. Transaction details and sales proceeds can be requested.
Transparency
The German government has previously stated that the laws goals to make the “economic activities of sellers on digital platforms transparent for tax authorities.” Sellers getting cash on these platforms must be taxed “equally and lawfully,” in response to the national law’s explanatory document.
‘Sellers must be taxed equally and lawfully.’
Accurate documentation might help prove the private nature of the sales. In such a sales log, all items with their purchase and sale prices have to be meticulously recorded.
