Small business purchasing in a third country
May 5, 2015 | 25,00 EUR | answered by Anton Pernitschka
Dear Sir or Madam,
I am a small business owner according to § 19 of the German Value Added Tax Act. Last month, I purchased goods in a third country (Ras Al Khaimah), a free trade zone with 0% VAT, via the internet using PayPal. These were digital goods such as license keys, downloads, etc. I received a net invoice (no tax shown, but also no indication that, for example, 0% VAT is included).
The supplier is a B2B wholesaler. Because I was able to download the goods directly from this portal, I never came into contact with customs.
Do I need to pay additional taxes on these goods in Germany? If so, where and how? Customs, tax office?
According to this post here, I do not need to pay taxes, which surprises me a bit.
http://frag-einen.com/steuerberater/umsatzsteuer/frage_zu_geschaeft_mit_unternehmer_aus_drittland-5006.html
Kind regards,
Dear questioner,
In the context of an initial consultation and your fee commitment, while observing the regulations of this forum, I would like to answer your question.
Based on the facts presented, other services are subject to value-added tax. Other services provided to a business by a supplier are deemed to be performed at the place where the recipient operates their business, according to § 3 a para. 2 UStG.
Under these circumstances, the other services would be subject to taxation in Germany because you operate your business in Germany as the recipient. Therefore, you are required to submit corresponding VAT returns or annual VAT declarations to your competent tax office, and the other services are to be taxed at 19%, even if you are classified as a small business owner according to § 19 UStG.
Software is not considered a good for customs purposes. A customs declaration is not necessary in this case.
This response is based on the information provided by you. Missing or incorrect information about the actual circumstances may affect the legal outcome.
Best regards,
Anton Pernitschka
Tax consultant
