In recent weeks, an increasing number of Chinese sellers have received audit notifications from the German tax authority, requiring them to pay back Value Added Tax (VAT) on historical transactions.
Other compliance violations:
The tax authority has obtained information from one or more electronic interface operators indicating that you have sold goods through their electronic interfaces. Based on the data provided by these operators, the VAT taxable sales you generated are higher than the sales you have declared so far. I plan to inform the electronic interface operator you are registered with, notifying you of the VAT compliance violation, as stipulated in Section 25e, Paragraph 4 of the German VAT Act (UStG). This may result in the electronic interface operator excluding you from continuing transactions through that interface.
Important reminder:
If you fulfill your VAT obligations by September 25, 2025, the notification to the electronic interface operator under Section 25e, Paragraph 4 of the German VAT Act will be waived.
Summary:This means that the tax authority has found that the sales data provided by platforms (such as Amazon/eBay/Allegro) is higher than what you declared, and is preparing to notify the platform according to §25e Abs. 4 UStG → The platform may directly suspend your selling privileges.
This action is not coincidental, but rather a necessary result of multiple overlapping policy backgrounds.
1. DAC7: Platforms Required to Disclose Historical Transaction Data
Since 2023, the EU has implemented the DAC7 directive, requiring major e-commerce platforms (such as Amazon, eBay, Allegro, etc.) to consolidate and report seller transaction data. This includes not only current sales data but also historical annual data.
For tax authorities, this is the first time they can directly access the complete transaction situation of sellers and systematically compare it with the sellers’ declaration records.
2. Policy Vacuum Before July 2021: No Withholding Tax
Until July 2021, the EU fully implemented the B2C e-commerce platform withholding VAT mechanism.
Before this, sellers had to independently complete VAT declarations and payments. However, due to the complexity of cross-border transactions, differences in understanding of rules, and some sellers lacking professional support, many declarations were incomplete. After obtaining platform data, the tax authority naturally viewed this period as a “high-risk period”.
3. Audit Practical Operations: Rough Calculation vs. Precise Calculation
In recent cases we have handled, the German tax authority typically adopts a rough calculation method:
– Directly using the total transaction volume from the platform as the basis, applying a uniform VAT rate;
– Rarely distinguishing between returns, tax-exempt exports, B2B sales, IOSS small packages, or special cases like overseas warehouse transfers.
As a result, the preliminary tax amounts sellers receive are often significantly higher than the actual taxable amounts. In other words, the greatest risk is not “back taxes”, but rather “over-calculation”.
4. Professional Advice
For sellers who have received audit letters, we recommend:
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Comprehensive data review: Break down platform transaction volumes into different transaction types, differentiating between taxable and non-taxable transactions;
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Submit correction explanations: Provide the tax authority with classified data and transaction explanations to avoid a one-size-fits-all tax adjustment;
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Re-pay taxes: After confirming the reasonable taxable amount with the tax authority, proceed with the final payment.
Conclusion
The recent audit action by Germany is essentially a policy overlay effect of DAC7 data disclosure + no withholding tax system.
For sellers, this is both a risk and a wake-up call: Compliance has entered the “data transparency era”, and only by organizing in advance and making precise declarations can one avoid future high back taxes and compliance risks.
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