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Activity Feed Forums EU Member States Germany In-App Sales and Commission: What is the VAT treatment?

  • In-App Sales and Commission: What is the VAT treatment?

    Posted by Mia on 12 October 2020 at 10:13 am

    Who is liable for VAT on “in-app” sales and when does a service commission exists?

    In a recent decision, the Hamburg Tax Court (FG) dealt with the VAT treatment of in-app purchases (i.e. where the user has the option of buying in-app purchases via the app store).

    The main questions of the court, from a VAT perspective, were as follows:

    • who is the supplier for in-app purchases by the end user?
    • is the app developer or the app store operator the supplier for VAT purposes?

    In short, the court considered that the commissionaire scheme, in accordance with sec. 3 para. 11 of the German VAT Act, applies and a commission exists when a contractor (contractor) is involved in the provision of another service and acts in his own name and on behalf of a third party. In other words, the in-app sale to the end user is deemed to be supplied by the marketplace operator of the app store for VAT purposes.

    If you would like to read more on the of the this case and the difference between the VAT treatment of (i) online marketplaces and (ii) in the scenario where the seller is not acting as an intermediary for VAT purposes (i.e. has their own website etc.), please see the following articles (external links):

    Mia replied 3 years, 7 months ago 1 Member · 0 Replies
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