As of January 1, 2023, stricter rules apply to platform operators such as Ebay, Ebay Kleinanzeigen, Etsy, Uber, Air BnB & Co. In Germany, more details are regulated by the Platform Tax Transparency Act (PStTG), which transposes the EU Directive on DAC-7 into national law.
If certain limits are exceeded, a platform operator is now obliged to transmit personal data as well as the turnover of the merchant or service provider to the Federal Central Tax Office. For more details, the BMF has also published, dated February 2, 2023, a Letter published.
Platforms under obligation
EU and non-EU operators of digital platforms that allow providers to perform certain activities on their platform in exchange for remuneration are required to report to the BZSt under certain circumstances. This applies in enabling the following activities:
- Rental and leasing of real estate,
- Services to be provided in person,
- Sale of goods or
- Renting of means of transport.
The law thus aims to ensure that platform operators help report sales by their providers to the tax authorities so that they can in turn carry out a reconciliation with private and business tax returns of the relevant individuals or companies. However, it is not yet clear how far the term “platform” extends. From a risk perspective, it must be assumed as things stand today that any system based on digital technologies could be regarded as a platform through which revenues can be generated and on which providers can be connected with users (customers).
From when does the whole thing apply?
The reporting requirement applies for the first time to sales from January 1, 2023. The first reporting deadline (for calendar year 2023) is January 31, 2024. The report must be submitted to the BZSt. Non-European platforms must also register for reporting with the BZSt as soon as certain requirements are met. Platforms with their registered office in Germany or the rest of the EU, on the other hand, are not subject to any such additional registration obligation. A size reduction for small platforms, for example. The law, however, does not provide for a limit on the number of employees who may not exceed certain size categories.
What does the PStTG mean for platforms?
Platforms must report providers and their sales if they meet certain criteria. In the case of real estate rentals, for example, this affects those providers who make fewer than 2,000 rentals per year per rental unit (e.g., house, apartment, hotel). If the provider trades in goods, those that have generated at least 30 transactions or EUR 2,000 in sales via the platform must be reported.
However, state-owned or listed providers are exempt from the reporting obligation. Accordingly, platform operators must record the providers already registered as of January 1, 2023, as well as all those who will be registered and generate sales in the current year, and check whether there is a reporting obligation.
What does the PStTG mean for providers?
On the one hand, it is often unclear to providers whether they qualify as entrepreneurs for VAT purposes or as commercial activities within the meaning of the German Income Tax Act (Einkommensteuergesetz). On the other hand, providers who qualify as commercial on the merits often lull themselves into a sense of security, as they consider it unlikely that they will be “discovered” by the tax office. Both situations are now threatened with disclosure to the competent tax authority by reporting the platform through which sales are generated.
Providers should therefore check whether their activity qualifies as entrepreneurial or commercial. If this is the case, the next steps – also with a view to the past – should be considered and discussed with the tax advisor.
I am unsure – what now?
Whether for platforms in implementing the reporting obligations or for providers in reviewing their tax obligations – quick action is required, as the first reporting period is already ongoing and the first report must be submitted at the beginning of the coming year.
We will be happy to support you in reviewing and implementing the next steps and provide you with comprehensive advice! Contact us for more information!