Update from July 2, 2020, 7:00 p.m.: Today we had a constructive exchange with the press department of Amazon Germany. They asked us to publish the following statement.
Statement from Amazon Deutschland Services GmbH (by e-mail exclusively to Taxdoo on 2 July 2020): Amazon has implemented the new German VAT rates (16% and 5%), which came into force on 1 July 2020, in the systems in accordance with the legal requirements. There are rare circumstances in which customers and sales partners using the invoicing Value Added Taxservice will see the German VAT rates applicable before 1 July 2020 on invoices for 1 July or shortly thereafter. This constellation can occur if the processing of an order begins before July 1 but is not completed until July 1 or shortly thereafter with the dispatch. If this happens, business customers should continue to be able to deduct the full Value Added Tax amount of VAT at the old VAT rate according to the invoice, as the transitional provisions of theBMF letter of 30 June 2020 under item 46 still allow full input tax deduction in July 2020 in these cases.
Our (Taxdoo) assessment is
From a purely legal point of view, there is only one time of performance.
Yes, there is also the aforementioned transitional arrangement (point 46 of the above-mentioned BMF letter) of one month (1 to 31 July 2020). However, this only comes into effect if the buyer can prove that the seller has actually paid the excess amountValue Added Tax , otherwise the tax authorities will suffer losses. This may still work at the level of two construction companies. In the mass business of e-commerce, where platforms largely prevent communication between buyer and seller, this is virtually impossible.
In addition, there are also numerous companies that purchase via Amazon-business, which are not entitled to input tax deduction because they provide tax-free and input tax-damaging output sales - e.g. doctors, insurance brokers, landlords...
Update from July 1, 2020, 11:15 a.m.: In the meantime, numerous FBA dealers have confirmed the following problem. For dealers - this is the minority - who use the calculation service in combination with own shipping (FBM or MFN), the problem does not seem to occur.
Update of 1 July 2020, 14:40: The following invoice generated by the calculation service for a delivery with dispatch notification of 13:57 today shows that the problem persists.
Update from July 1, 2020, 16:00 hrs: Apparently, Amazon internally the order receipt is used as the relevant date. The following answer from a support employee illustrates this - also the shirt-sleeved solution to correct this error at the beginning of August in the context of the VAT report.
This seems more than ignorant! Why? Because the invoices are in the world and probably will remain so. So this too high tax is owed by the traders (§14c paragraph 1 UStG).
So what's the problem?
The calculation Value Added Taxservice Amazon designed by an external provider for this purpose has not been able to implement the temporary reduction of VAT rates as of 1 July 2020 - as of today.
Here again as a reminder the turnover tax system.
Here you can see an invoice issued by the calculation service for a delivery with a dispatch date of 1 July 2020. The sales tax result is wrong.
What are the consequences?
The consequences for you as a trader or your clients are that you have to pay too much Value Added Tax to the tax office. In Germany this is stated in § 14c paragraph 1 UStG.
How does it look for buyers on Amazon-Business?
More and more companies are buying their products on the B2B platform Amazon-Business.
There the use of the calculation Value Added Taxservice is in fact - even if Amazon it is framed differently - obligatory. A comprehensive description of the weaknesses of this methodology can be found here.
Are buyers allowed to deduct this excessive amount Value Added Tax as input tax?
However, the tax authorities have agreed to a transitional arrangement of one month.
What does that mean?
If 19 or 7 percent is erroneously Value Added Tax reported in the period 01.07.2020 to 31.07.2020, the buyer may deduct this tax as input tax if the seller has paid it to the tax office.
This sounds fair, but in practice it will probably mean that the buyer will have to prove that the seller has actually paid 19 or 7 percent to the tax office.
However, this is not the only weakness of the calculation Value Added Taxservice.
Not the only weakness of the calculation Value Added Taxservice
We at Taxdoo have been pointing out for a long time that the results generated by the calculation service will be a rich source for tax audits in the foreseeable future.
For example, according to our evaluations, 5 to 8 percent of the VAT-IDs recorded there are invalid. For cross-border B2B deliveries - basically tax-free intra-Community deliveries - the calculation service would therefore Value Added Tax have to charge.
In practice, however, these deliveries are still considered tax-free by the calculation service - a violation of applicable law.
On the safe side with Taxdoo
We at Taxdoo follow the mantra that we evaluate every e-commerce transaction - no matter which channel - completely autonomously for VAT purposes.
This is now a high double-digit million amount per month and with this we offer you or your clients the additional legal security.
The compliance platform for the digital economy
... and forms for the leading online retailers in Europe besides the handling of the current Value Added Tax-Compliance, Intrastat and financial accounting (Taxdoo is a partner of DATEV) also offers numerous other compliance services via a unique platform.
If you want to know more about how you Value Added Taxcan efficiently and securely map compliance, financial accounting and much more via a platform, then book your individual and free initial consultation with the compliance experts from Taxdoo!
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P.S.: Taxdoo has been an official partner of DATEV in online trading since the beginning of 2020.