New German VAT Rules In eCommerce As Of January 2015

Although online shop providers had to implement extensive changes to consumer rights (in particular, the new rules regarding the right of withdrawal) on the basis of the implementation of the EU Consumer Rights Directive (2011/83/EC) only in June of this year, new changes to eCommerce are already pending: From 1 January 2015, globally, online retailers that provide services to consumers in an EU country electronically (B2C sales) must pay the VAT in the EU country in which the consumer resides (the so-called country-of-destination principle).

Taxation of such B2C sales within the EU was previously determined in accordance with the country-of-origin principle, i.e., the online shop provider invoiced each of its private customers according to the VAT applicable in the customer's country. The country-of-destination principle applied only for customers from non-EU member states. However, starting from 2015, the country-of-destination principle will be extended to