International app sales as a small business owner
April 21, 2016 | 25,00 EUR | answered by Grit Weidauer
I would like to offer my software/app for download as a small business owner on a well-known sales platform. The operator of the platform is based in Ireland. The buyer pays the amount directly to the platform operator's account when purchasing the app. According to the new regulation from 01.01.2015 for electronic goods, the platform operator directly pays the respective VAT valid in the buyer's country to the tax office. I then only receive the net amount monthly, minus the platform fees, transferred to my account by the platform operator. So the buyer does not pay directly to me, but to the platform. Sales are made to customers from all over the world.
Now my question: Can I proceed as a small business owner in this way? The platform operator always lists the applicable VAT rate for the buyer of my app on the invoice. However, as a small business owner, I should not be doing this myself (at least for German customers). I actually do not want to waive the small business regulation according to §19 and thus save myself the time-consuming monthly input tax return. Additionally, I do not have a VAT ID. Is the above concept possible under the above-mentioned circumstances? If so, how should I proceed?
Hello,
You should seek help directly from a tax advisor on a case-by-case basis.
Here are some comments or questions to be clarified:
1. Who acts as the seller? Is it a service commission?
2. The fee that the platform charges you would likely fall under § 3a UStG. Even if the platform is not based in Germany, the VAT liability shifts to Germany, and you must pay the VAT for the platform in Germany. Please note that as a small business owner, you still do not have the right to deduct input tax.
3. When applying § 3a para. 5, your VAT liability shifts to the consumer's place of residence (please note this only applies to B2C transactions). Therefore, German VAT law in relation to § 19 UStG does not apply. The VAT must be reported and paid in the consumer countries or through MOSS to the Federal Central Tax Office. It seems that the platform will handle this for you.
4. For German customers (B2B and B2C): Is there a possibility to inform the platform that § 19 UStG should be applied here? If the platform also issues invoices and shows VAT, this is incorrect! You are still liable for the tax shown.
As you can see, there are several problematic areas that cannot be answered definitively here.
Best regards,
Grit Weidauer
