Germany Planning Crackdown on Online Tax Evasion – Paper

German Finance Minister Olaf Scholz plans to unveil legislation next week aimed at reducing tax evasion by online dealers using platforms such as eBay and Amazon, the German newspaper Rheinische Post reported on Thursday.

The draft law calls for holding the online platforms liable for the sales tax of dealers, unless they can prove that those parties have registered with the proper tax authorities, according to the newspaper.

It said the finance ministry expected the measure to generate several hundred million euros in additional tax revenues each year.

The draft law cited what it called an “urgent need to act” given evidence that online trading was resulting in increasing amounts of tax evasion.

The law also calls for holding online platforms responsible if online dealers fail to pay their German taxes, despite registering in Germany.

“The goal is to protect honest tax-paying companies from competitive distortions,” the paper quoted a ministry official as saying.

Germany is Amazon’s second largest national market after the United States. Net sales grew by 20 percent last year to $17 billion, accounting for 9.5 percent of the total, according to the company’s annual report. (Reporting by Andrea Shalal; Editing by Andrew Bolton)

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