One Stop Shop, Marketplace Liability & Value Added Tax-Identification numbers: Do foreign VAT-IDs have to be retained?

We had reported that had caused a lot of confusion among sellers Amazon with the VAT-ID check due to the tightening of marketplace liability. In this context, the question also arises as to how traders should deal with their foreign VAT-IDs.

But let’s start at the beginning.

Why (so far) VAT-IDs abroad?

In the past, many online traders with deliveries to other EU countries often needed VAT IDs in EU countries outside their registered office. The reason was that they had exceeded the old delivery thresholds with their B2C deliveries to the respective country and thus became liable to pay tax locally in each case.

After the introduction of the One-Stop-Shop, the need for foreign (EU) VAT IDs will no longer apply for cross-border sales to private individuals (=”distance sales”) within the EU, provided that the OSS procedure is used.

Some traders have now, immediately after the introduction of the OSS procedure, started to initiate deregistrations in the countries where they only make distance sales. Or they have informed the local tax office about the use of the One-Stop-Shop procedure. In both cases, the previous VAT ID automatically becomes invalid.

How should this situation be classified if traders sell internationally via marketplaces such as Amazon and Amazon now requires a corresponding foreign VAT ID?

VAT-ID required & use of One-Stop-Shop: How does this fit together?

Let’s take a look at this with an example.

Let’s assume that you only make long-distance sales from Germany in Austria. Until now, you were registered for VAT in Austria because you exceeded the local delivery threshold. Since you have been using the One-Stop-Shop procedure for the Europe-wide declaration of your distance sales since 1 July 2021, you have notified the Austrian tax office of this.

As a result, the Austrian tax office has “limited” your Austrian VAT ID. This means that you no longer have to submit monthly VAT returns in Austria.

As described in our overview article on marketplace liability, there is also marketplace liability in Austria, analogous to the regulation in Germany. Therefore, many traders based in Germany with shipping activities to Austria have now found the following notice in Amazon Seller-Central:

This note leads to the following questions and our answers

1. Do I still need a local VAT ID in Austria due to the regulation on marketplace liability?
   No, you do not need one. If you only make distance sales to Austria, there is no obligation to register for VAT in Austria if you declare your distance sales via the One-Stop-Shop.
   
   This is also the case in Germany if a foreign entrepreneur only makes distance sales in Germany and uses the One-Stop-Shop. This is also clarified in the BMF letter of 20.04.2021.
2. Can Amazon now block your account for sales to Austria if there is no valid US ID for Austria?
   In our opinion, the information that you are participating in the OSS procedure should ensure that you can continue to ship to all EU countries – even if VAT IDs are declared invalid. This is the statement we know fromAmazon .

It is to be expected that many practical problems will continue to arise in the coming weeks in connection with the VAT-ID check due to the tightened marketplace liability.

How should online traders and especially Amazon sellers now proceed with their EU VAT IDs?

In order to avoid account suspensions on Amazon , you should refrain from making rash changes to your seller account. Multiple changes at short intervals can be counterproductive in the current environment of automated checks of VAT IDs.

However, you should ensure the following points:

• If you have already initiated deregulations in some countries AND there is also marketplace liability in these countries (e.g. AT, FR, IT), then check again whether you have deposited in Seller Central that you are participating in the OSS procedure.
• If you use foreign Amazon warehouses, your VAT registrations must remain valid anyway. In these cases, these should of course also be stored in your seller account.

Conclusion: According to current information, there do not seem to be any restrictions for you as a Amazon seller if you deregister in a receiving country due to the use of the One-Stop-Shop, as long as you also enter the OSS participation in the appropriate place in Seller Central. You can ignore the warning in Seller Central in these cases.

For online traders who do not sell via marketplaces such as Amazon, but only via their own webshop, the above topic is not relevant.

This is our current assessment. If there are any significant new developments regarding the handling of foreign VAT IDs in the course of the OSS procedure, we will keep you informed in our blog.