Niels Webersinn
by Niels Webersinn
Each year in November, the sales promotion event Black Friday is now marketed to us in Germany. This day, which was originally a sales event for local retailers in the USA the day after American Thanksgiving, has become increasingly established internationally, particularly through the promotion of online retail with appropriate marketing support.
The rapid growth in online trade continued in 2022. In this context, it is of great importance from a tax consulting perspective that the data basis is clean for the fulfilment of tax obligations in order to stand up to the critical eyes of the tax office.
Start-ups therefore need a suitable environment of digital assistants. Functioning interfaces are at the heart of every store operator. After all, accounting also must keep pace with the fast-paced and synchronised online world.
In concrete terms, this means that a tax consultant must be able to understand, process and technically implement the remedy to challenges faced by a client. The client’s data must be processed via suitable interfaces within the tax firm.
Especially in the case of larger e-commerce mandates with several thousand booking entries per day, the classic functions are not sufficient and must be complemented by other solutions. This enables the processed data to be understood by the client as added value, and to be used as the basis for further decision-making and planning processes in everyday business.
Mastering these interfaces leads to a win-win situation, and becomes more and more important with the increasing size and digitalisation of a mandate in order to maintain an overview as a tax advisor of the ongoing business processes, and, in the case of foreign transactions, to ensure fully comprehensive tax advice.
It is also important for e-commerce clients to keep an eye on current VAT legislation. Currently, the focus is on the implementation of the EU’s Payment Service Providers Directive which comes into effect 01 January 2024.
In order to curb VAT fraud, payment service providers such as PayPal will be required by the new Section 22g German VAT Act to keep records of cross-border payments and transmit them to the Federal Central Tax Office. The information collected is to be transmitted to a Central Electronic System of Payment (“CESOP”) for clearing purposes.
The obligation to collect data will arise if more than 25 cross-border payments are made to the same payee within a quarter (Section 22g (1) S. 2 UStG-E). The data collected will include VAT ID, tax numbers and IBAN of the payee as well as further information on all above-mentioned payment services provided in a quarter. Infringement of this obligation may be subject to a fine pursuant to Section 26a (2) UStG-E.
Payment service providers now have one year to prepare for the new recording and reporting requirements. Merchants should be prepared to provide the necessary information to the payment service provider if the data is not already available.
Niels Webersinn is Director for international tax law, asset transfers and agricultural tax law at nbs partners in Hamburg. Niels Webersinn has lived in the USA and France for several years and is therefore familiar with the pitfalls of international tax regulations. He is married and has two kids. Contact Niels.
nbs partners is a multidisciplinary association of certified public accountants, lawyers, and certified tax advisors with a focus on the audit and advisory of small, mid-size and large entities, as well as international groups and high net-worth individuals.
GGI member firmnbs partnersHamburg, GermanyT +49 40 44 19 60 12
Auditing and Accounting, Tax, Law Firm Services
