Germany: New German VAT Rules In eCommerce As Of January 2015

Although online shop providers had to implement extensive changes to consumer rights (in particular, the new rules regarding the right of withdrawal) on the basis of the implementation of the EU Consumer Rights Directive (2011/83/EC) only in June of this year, new changes to eCommerce are already pending: From 1 January 2015, globally, online retailers that provide services to consumers in an EU country electronically (B2C sales) must pay the VAT in the EU country in which the consumer resides (the so-called country-of-destination principle).

Taxation of such B2C sales within the EU was previously determined in accordance with the country-of-origin principle, i.e., the online shop provider invoiced each of its private customers according to the VAT applicable in the customer's country. The country-of-destination principle applied only for customers from non-EU member states. However, starting from 2015, the country-of-destination principle will be extended to sales within the EU. This amendment is based on Directive 2008/8/EC, dated 12 February 2008, which is to simultaneously be implemented by all EU member states early next year.

Which transactions are affected by the changes? Commercial transactions with a customer who is a resident in the EU. Furthermore, it is a requirement that the service, is provided by electronic means.

The following practical cases are exemplary of the most important electronic services:

  • Hosting offers
  • Streaming offers
  • Fee-based member portals
  • Operators of online databases
  • Downloads of music and movies
  • Providers of digital photographs or e-books
  • Operators of online sales platforms
  • Online tutorial offers

Furthermore, the change even affects businesses from outside the EU providing electronic services within the EU.

Which transactions are not affected by the changes? Agreements with regard to electronic services, between businesses (B2B) are not affected by this new regulation.

Similarly, agreements negotiated on the internet and only dealing with physical merchandise, are not affected.

What are the concrete changes? Starting with January 2015, online shop providers must for EU transactions pay VAT in the (private) customer's country of origin (the so-called taxation according to the country-of-destination principle):

  • For instance, if a Spanish customer purchases and downloads an e-book from a German provider, the latter must pay VAT in Spain
  • Conversely, if a German customer purchases and downloads an e-book from a Spanish provider, the latter must pay VAT in Germany

Introduction of a so-called "Mini-One-Stop-Shop" (one-time registration) for providers of electronic services located in an EU member state, with the consequence that the EU provider does not have to register in each member state. However, the provider must then present in its country of residence a separate declaration of all sales from electronic B2C services within the EU. The distribution of tax revenue to the respective member states then is the responsibility of the administrative authorities.

Amendments and/or adjustments to billing and price labelling for customers, since customers are to be billed with VAT that is applicable in the customer's country; i.e., in the extreme, it would be necessary to provide 28 different billing and price labelling versions.

Practical problems The new regulation has the effect that businesses that provide services across the EU must increasingly grapple with VAT laws applicable to the countries of residence of its consumers, because, despite the general harmonisation of the VAT regulations, considerable discrepancies still exist between EU member states.

Starting in January 2015, providers will be required to provide price labelling and sales adjusted to the respective VAT applicable in those EU countries in which they provide electronic services.

The "Mini-One-Stop-Shop" application must not obscure the fact that, while VAT revenue is payable in only one country, the revenues are subject to local regulatory frameworks in various member states.

Starting in January 2015, providers will be required to prove the location of a consumer, which cannot be adduced by conventional means (ID card, passport) within the scope of electronically provided services. The most practical solution appears to be localisation of the consumer via IP address.

What must be done in practice? Application and registration with the Bundeszentralamt für Steuern (BZSt) (Central Federal Tax Office) for participation in the "Mini-One-Stop-Shop" facilitation of procedure for VAT on electronic services.

As of 1 October 2014, affected German businesses can apply for participation in the "Mini-One-Stop-Shop" facilitation of procedure for VAT on electronic services at the Bundeszentralamt für Steuern (BZSt) (Central Federal Tax Office). With this, sales generated in other member states of the European Union and falling within the scope of the new regulations can be declared with the BZSt, and VAT can be paid in one lump sum. The application can be made on the online portal of the BZSt at

Each business from the EU or a third country, offering electronic services across the EU, must consider tax-related issues (and reporting requirements) in each EU country in which it offers its electronic services.

Considering the fact that different EU countries have different tax rates, and considering that private customers must always be provided with sales prices including VAT, the price labelling on the website and invoicing must be adjusted. The location of the recipient of electronic services ought to be identifiable based on the IP address.

Accordingly, in the context of VAT tax advance returns, in-house accounting must be adapted to the problems associated with the different VAT rates, so that VAT tax is paid correctly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.