On December 1, 2023, the Berlin International Tax Office was officially established. Due to the relocation of the tax office space and the redistribution of tax duties, the recent German VAT registration and other tax processing processes may introduce some additional waiting time. We will also keep an eye on official announcements for the latest developments.
Since 2022, the German federal tax authorities have been planning an international tax office, the Berlin International Tax Office, and has located it in Neuk LLN, close to the existing tax office.
According to the tax authorities, the NEUK LLN tax office receives about 650 applications for new VAT registration from overseas companies every week.
In view of the increasing number and complexity of the tasks, the new Berlin International Tax Office will assume the responsibility of registering and managing VAT for foreign companies from more than 100 countries and regions in Germany that carry out various activities in Germany, such as retail, etc., and are subject to VAT by law despite not having a registered office in Germany.
What are the impacts on cross-border e-commerce?
1.It is not possible to estimate the timeliness of VAT registration during the transition period:
From 1 December 2023, the Berlin Tax Office will start large-scale data transfers and work with the new tax office to handle VAT management for overseas companies. During the transition period, the timeliness of new German VAT registration applications will not be accurate**, and VAT applications that are already under review may be subject to some delays.
2.Increased tax compliance requirements:
Back in 2021, the Berlin Tax Office set up a VAT fraud investigation team to conduct random checks on sellers' accounts and require sellers to provide a series of VAT compliance documents. If the tax bureau believes that there is tax evasion in the account, it will require the e-commerce platform to freeze the sales authority and funds of the store. As a result, sellers may need to pay more attention to new tax regulations and ensure accurate reporting and payment of VAT to accommodate possible increased compliance requirements.
3.More efficient tax processes:
The establishment of the new International Tax Affairs Bureau may have accelerated the registration and tax processing process for cross-border companies. With a professional team to take care of the tax issues of foreign companies, sellers may experience more efficient services, less cumbersome processes, and more efficient work.