Germany is the largest e-commerce market in continental Europe
Germany's e-commerce market is forecast at €92.4 billion in 2025, an increase of around 4% year on year (HDE, the German Retail Association). Online marketplaces account for roughly €44 billion, close to half of all German online retail (bevh, the German E-Commerce and Distance Selling Trade Association).
A meaningful and growing share of that volume is sold by foreign companies. Industry estimates put cross-border and foreign-seller sales at roughly €8.9 billion, about 10% of German online sales, with non-EU marketplaces such as Temu and Shein alone estimated at €2.7 to €3.3 billion. Every one of those sellers that stores stock in Germany or ships B2C from German warehouses has a German VAT obligation.
Sources: HDE e-commerce forecast 2025; bevh marketplace data 2025; third-party market estimates for foreign-seller share (see methodology).
The compliance gap: the problem Germany is trying to closeThe EU loses an estimated €128 billion of VAT a year
The EU VAT compliance gap, the difference between VAT expected and VAT actually collected, was an estimated €128 billion in 2023, around 9.5% of total expected VAT revenue (European Commission, "VAT Gap in the EU 2024 edition"). Germany's compliance gap rate was about 9.7%, and Germany is one of six member states that together account for roughly three quarters of the entire EU gap.
E-commerce has been a known weak point. When Germany introduced marketplace VAT liability, it was responding to an estimated €5 billion a year of EU-wide e-commerce VAT fraud, much of it attributed to foreign sellers who were either unaware of their obligations or evading them. The German marketplace-liability rules (§22f and §25e UStG) took effect for non-EU sellers on 1 March 2019 and for EU sellers on 1 October 2019, making platforms like Amazon jointly liable for unpaid VAT unless every seller is properly registered.
Sources: European Commission VAT Gap report 2024 edition; German marketplace-liability legislation (§22f / §25e UStG).
The VAT compliance gap by EU country (2023)
The 2023 figures reversed years of improvement: the EU-wide compliance gap rose from 7.9% to 9.5%, the first increase after a steady decline (it had fallen to 11.1% in 2019). In absolute terms the gap grew by roughly €27 billion in a single year. Germany's own gap jumped 3.1 points to 9.7%.
| Country | VAT compliance gap (2023) | Year-on-year change |
|---|---|---|
| Romania | 30.0% (largest in the EU) | — |
| Poland | 16.0% | +4.8 pp |
| Italy | 15.0% | — |
| Germany | 9.7% | +3.1 pp |
| France | 5.6% | — |
| Austria | 1.0% (smallest in the EU) | — |
Beyond the compliance gap, the EU also runs a "policy gap" of about 50.5% of the notional ideal VAT base, the revenue forgone to reduced rates and exemptions. And the fraud figure is large in its own right: Europol estimates VAT carousel (MTIC) fraud alone costs EU member states €40 to €60 billion a year. The single largest case ever detected, EPPO's "Operation Admiral", was worth €2.2 billion and spanned close to 9,000 companies across 26 countries.
Sources: European Commission "VAT Gap in the EU, 2024 edition" (per-country table via Tax Foundation); Europol / EPPO via European Parliament EPRS briefing.
The One-Stop-Shop: the scale of cross-border VATOSS collected over €33 billion in 2024 and is growing 26% a year
The EU's One-Stop-Shop reform has become one of the most significant VAT changes of the decade. In 2024, more than €33 billion of VAT was declared through the three OSS and IOSS schemes: €24 billion via the Union OSS, €2.8 billion via the non-Union OSS, and €6.3 billion via the Import OSS. That is a 26% increase over 2023's €26.3 billion.
- Cumulatively, member states have collected nearly €88 billion through OSS and IOSS since the reform launched in mid-2021.
- Over 170,000 businesses are now registered, with more than 20,000 new Union OSS registrations added in 2024 alone.
- For non-EU sellers holding stock in Germany, Germany acts as the Member State of Identification, so a single quarterly OSS return can cover B2C sales across the entire EU.
Source: European Commission, results of the VAT e-commerce package for 2024.
The import wave: where the foreign-seller pressure comes from4.6 billion low-value parcels entered the EU in 2024
The scale of cross-border e-commerce into the EU has exploded. In 2024, roughly 4.6 billion low-value consignments (worth €150 or under) entered the EU, about 12 million parcels every day and roughly double the year before. 91% of those sub-€150 shipments came from China. Around 400,000 Shein and Temu parcels reach German customers every single day, and the two platforms together now reach more than 75 million users across the EU.
This is why the rules are tightening. EU customs physically inspect only about 0.0082% of products entering Europe (roughly 82 items per million), and up to 65% of low-value parcels are believed to be undervalued to evade VAT and duties. The EU's €150 low-value import VAT exemption ends 1 July 2026. Chinese sellers, meanwhile, have become the majority of new Amazon third-party sellers worldwide, at 62% of new registrations and over 63% of all Amazon sellers globally.
Sources: European Commission (low-value imports 2024); HDE (Temu / Shein Germany); European Parliament / Cross-Border Magazine; Marketplace Pulse (Amazon seller share).
The average OSS-registered business declared roughly €195,000 of VAT in 2024, and OSS revenue has grown more than fourfold in under three years.
How we derived this: €33.1bn declared in 2024 divided by 170,000 registered businesses gives an average of about €195,000 per business (a rough cross-scheme average, since the three schemes serve overlapping populations). The growth figure compares the €7.75bn collected in the second half of 2021 with the €33.1bn collected in 2024. Inputs are European Commission figures; the combination and the averages are Vaytax's own analysis and are estimates, not official per-business measurements.
The numbers that decide whether you must register
| Rule | Figure |
|---|---|
| German standard VAT rate | 19% |
| German reduced VAT rate (food, books, etc.) | 7% |
| EU-wide distance-selling threshold (OSS) | €10,000 per year, across all EU countries combined |
| Registration threshold for foreign stock held in Germany | €0 (register from the first euro) |
| Monthly VAT filing required if annual VAT exceeds | €9,000 (changed 1 Jan 2025; quarterly between €2,000 and €9,000) |
| EU low-value import VAT exemption | Ends 1 July 2026 (replaced by a per-item charge) |
The single most misunderstood number here is the threshold. The €10,000 figure applies only to cross-border distance sales under the One-Stop-Shop. The moment a foreign company stores goods in a German warehouse, including via Amazon FBA, there is no threshold at all: registration is mandatory from the first sale.
Sources: German VAT Act (UStG); EU Commission OSS rules; §18 UStG filing-frequency thresholds (2025).
The cost of getting it wrongWhat late or missed German VAT actually costs
Germany applies several separate charges to late VAT, and they stack:
- Säumniszuschlag (late-payment surcharge, §240 AO): 1% per started month of the unpaid VAT, calculated on the amount rounded down to the nearest €50. This is automatic.
- Verspätungszuschlag (late-filing surcharge, §152 AO): discretionary for monthly returns, up to 10% of the VAT due, capped at €25,000.
- Nachzahlungszinsen (interest, §233a AO): 0.15% per month (1.8% per year), but only after a 15-month grace period, so this mainly affects amounts left unresolved for over a year.
Note on the interest rate: the §233a rate was reduced to 0.15% per month in the 2022 reform (from 0.5%). Many online sources and older guides still quote the outdated 0.5% figure. The current statutory rate is 0.15% per month, with the next legislative review due by 1 January 2026.
A foreign seller who leaves €50,000 of German VAT unpaid for 12 months faces roughly €6,000 in late-payment surcharges alone, before any discretionary late-filing surcharge, which can add up to a further €5,000.
How we derived this: €50,000 × 1% × 12 months = €6,000 in Säumniszuschläge (§240 AO). The Verspätungszuschlag (§152 AO) is discretionary and capped at 10%, so up to €5,000 more. Interest under §233a only begins after 15 months and so does not apply within this 12-month window. Inputs are German statutory rates; the worked example is Vaytax's own calculation and is an estimate, not a Finanzamt assessment. Try your own figures in the calculator below.