Germany is the largest e-commerce market in continental Europe
German B2C e-commerce reached €98.6 billion in 2025 including digital services, of which €83.1 billion was goods, up 3.2% year on year (bevh, the German E-Commerce and Distance Selling Trade Association). It is closing in on the symbolic €100 billion mark. Online marketplaces are the centre of gravity: they grew fastest of any channel at +4.9% and now account for €46.2 billion, 56% of all German online retail.
A large and growing share of that marketplace volume is sold by foreign companies. Chinese-origin platforms alone (Shein, Temu and AliExpress) grew 27.2% to €3.7 billion in 2025, and bevh notes that roughly every 15th online order in Germany is now placed with one of these large Asian platforms. Every one of those sellers that stores stock in Germany or ships B2C from a German warehouse has a German VAT obligation from the first sale.
Source: bevh full-year 2025 results (published January 2026).
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", 2025 edition, published December 2025). The 2023 estimates also mark a reversal: after several years of narrowing, the EU gap stopped shrinking, which is exactly why enforcement keeps tightening. Germany's own compliance gap was €31.3 billion, about 9.7% of the VAT it should have collected, and Germany is one of six member states (with France, Italy, Poland, Romania and Spain) that together account for roughly three quarters of the entire EU gap. For scale, VAT is one of Germany's largest taxes: it raised on the order of €290 billion in 2023, so even a single-digit gap rate is tens of billions of euros.
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, 2025 edition (December 2025); 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", 2025 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.
- The Import OSS (IOSS), used for low-value imports, was the fastest-growing scheme: VAT declared through it jumped 62% to €6.3 billion in 2024, and IOSS registrations rose from 12,087 at the end of 2023 to 12,799 at the end of 2024.
- 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 (published July 2025).
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. Low-value consignments (worth €150 or under) entering the EU went from 1.4 billion in 2022 to 2.3 billion in 2023 and 4.6 billion in 2024, roughly doubling in a single year, or about 12 million parcels every day. 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.
The buying base keeps widening too: 77% of EU internet users shopped online in 2024, up from 59% a decade earlier (European Parliament). 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 customs duty exemption ended on 1 July 2026: sub-€150 parcels now carry a flat customs duty of €3 per item, a transitional measure in force until 1 July 2028, when the EU Customs Data Hub is due to take over and normal tariff-based duties apply. (Import VAT is unaffected; it has been due on all commercial imports since July 2021.) The wider e-commerce customs reform is expected to add around €1 billion a year in customs revenue. 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 Parliament (low-value import parcels and EU online-shopping share, 2025); European Commission EU Customs Reform (€3 per-item duty in force since 1 July 2026; Commission guidance and legal text on the temporary flat fee, June 2026); HDE (Temu / Shein Germany); 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.
VAT is rarely the only registration a foreign seller needs. Any business that imports goods into the EU as the importer of record must also hold an EORI number (Economic Operators Registration and Identification), a single ID valid across all 27 member states and mandatory for every customs import, export or transit operation (European Commission). For the full picture of how EORI and German VAT fit together, see our guide to the EORI number for foreign sellers.
Sources: German VAT Act (UStG); EU Commission OSS rules; §18 UStG filing-frequency thresholds (2025); European Commission (EORI requirement).
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, and when assessed 0.25% of the VAT due per started month, minimum €25 per month, 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 €25,000, 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.