Tax liability on the Internet: Amazon and Co. get reporting obligation

To ensure that sellers and service providers on the Internet do not earn money bypassing the tax authorities, the Bundestag has passed a reporting requirement for operators of corresponding platforms. Services such as Amazon and Airbnb are affected.

Bundestag decides on reporting obligation for

With the modernization of tax procedure law with administrative authorities passed by the Bundestag, the German parliament is now implementing an EU directive. This states that platform operators who offer third parties the opportunity to earn money will have a reporting obligation imposed on them. Thus, once the law comes into force, they will have to pass on their users’ income to the relevant tax authorities. To take account of the directive, the new federal law will also be worded in such a way that it affects not only German merchants, but also those based in another EU country. This should ensure more cooperation between EU members.

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Internet is so far intransparent

The traffic light coalition underpinned their bill with the fact that affected platforms on the Internet is still a letter with seven seals. It is simply too complicated to be able to look into the earnings of the users. This lack of transparency must be countered, he said, so that earnings do not bypass the tax authorities. This is particularly problematic on platforms that focus on short-term services, such as Airbnb. But the law also covers very simple sales of goods on Amazon or private transport from A to B via Uber. In view of the rising number of users, the government now wants to finally tackle the problem.

After all, the opportunities for sellers and service providers to earn money are increasing along with them, as it were. This increases the attractiveness of this business sector, which is why more and more people are now offering goods and services on the same. For the tax authorities, it is extremely complicated to ensure fair and, above all, lawful taxation in this area. After all, they assume that there is a huge number of unreported cases that are not passed on by the business operators and are thus earned “illegally”. In particular with offerers, who do not have their seat in Germany, but abroad, the problem is large.

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In the beginning is the identification

The reporting obligation of the portals should now not only include to report the total income of all users. Instead, they should also pass on the personal data on the providers themselves to the Federal Central Tax Office. In combination with the income, the tax authorities can then determine the tax liability. On top of that, the law is to speed up the external audit process so that providers can be audited more quickly and easily. According to the traffic light coalition, the new law will also take into account the size of individual companies. In this way, smaller companies in particular are to be better off.

The opposition in the form of the CDU/CSU is not at all convinced by the plan. On the contrary, representatives warn of a distance between tax authorities and companies. On the part of the network for tax justice the joy is however large. After all, they have been complaining for some time that well-known Internet platforms are gradually turning into “tax havens. Here, it is important to initiate new regulations. However, the “how” of implementation is also being questioned here. Finally, one fears that especially the “big fish” could get around tax obligations through a targeted company headquarters.

Doubts about the effectiveness for Internet remain

To what extent the new regulation can lead to more transparency is controversial. After all, one or the other loophole does show up in the draft law. For example, Prof. Dr. Ekkehart Reimer, Director of the Institute for Financial and Tax Law at the University of Heidelberg, is a thorn in the side that crowdfunding projects are not covered by the new regulations. The exceptions of high-priced items such as motor vehicles are also questionable in his view. Because of the exceptions, he also warns that politicians are creating a “bureaucratic monster”.