VAT on Platform Sales – Who Is Actually Liable for the Tax?

Online marketplaces like Amazon, eBay, Etsy, or Zalando have become an integral part of modern eCommerce. While they offer sellers access to millions of potential customers, they also raise complex VAT questions: Who is actually liable for the VAT – the platform or the seller?

The answer depends on the specific circumstances and has been increasingly regulated since July 2021 under the EU VAT reform – and even more so under the upcoming ViDA package (“VAT in the Digital Age”).

1. Platforms as “Deemed Supplier”

Since the EU VAT reform of 2021, online marketplaces can themselves become liable for VAT. This applies when they facilitate sales of goods by non-EU sellers to EU consumers (B2C).

In these cases, the platform is legally treated as if it had sold the goods itself – the so-called “deemed supplier” rule.

This means:

1. The platform collects, reports, and remits the VAT.
2. The actual seller (e.g., a merchant based in China or the U.S.) is no longer considered the supplier for VAT purposes.
3. For the consumer, nothing changes – they still pay the gross price including VAT.

Example:
A Chinese seller sells a smartphone via eBay to a customer in Germany. Since the seller is established outside the EU and the goods are worth less than €150, eBay is regarded as the supplier for VAT purposes and must remit German VAT via the Import One Stop Shop (IOSS).

2. When the Seller Remains Liable

The “deemed supplier” rule does not apply in all cases. If the seller is established within the EU or the goods exceed the IOSS threshold of €150, the seller remains liable for VAT.

In this situation:

1. The EU seller must report sales via the One Stop Shop (OSS) or register for VAT in the respective Member States.
2. The platform acts only as an intermediary, not as the taxpayer.
3. The seller remains responsible for correct invoicing, VAT rates, and accounting.

3. Platform Obligations Under ViDA

The ViDA package, adopted on 11 March 2025, tightens the rules even further. Starting in 2027, platforms will be required to:

1. report detailed transaction data in real time,
2. verify the identity and establishment of sellers, and
3. in certain cases, automatically calculate and remit VAT, even when the seller is based within the EU.

The goal is to increase transparency and combat VAT fraud, especially in cross-border eCommerce.

For platform operators, this means greater compliance obligations and technical requirements.
For sellers, it means greater clarity—but also the need to ensure that their systems and processes align with platform data.

4. What Sellers Should Do Now

1. Analyze sales channels: Through which platforms are sales made? From which countries do goods and customers originate?
2. Check who is liable for VAT: For marketplace sales involving third countries, the platform may be liable—but not always.
3. Use OSS/IOSS correctly: Ensure transactions are reported properly to avoid double taxation or penalties.
4. Review contractual terms: Sellers should clearly understand from platform agreements who is responsible for VAT reporting.
5. Ensure data accuracy: Correct information on delivery locations, values, and VAT rates is essential—especially in view of upcoming real-time reporting obligations.

Conclusion

Online trade is becoming increasingly international through digital platforms – and consequently, VAT compliance more complex.

The key takeaway: The more global the business, the more important the clear distinction between seller and platform.

The ViDA package will simplify some processes but also introduce stricter documentation and transparency requirements.

Those who clarify who is liable for VAT and when will reduce their compliance risks – and can focus on what matters most: selling successfully.