New rules for private sales via Ebay & Co. law means that tax authorities now have a better overview of the income from private sellers on Ebay and Co. but from what amount must the income be taxed?
A new law that came into force at the beginning of the year obliges sales platforms to forward data to authorities. What does that mean? The wage tax assistance (Lohi) Bavaria explains the legal situation: “The PStTG (abbreviation for platform tax transparency law) obliges operators of online platforms such as eBay, Vinted, Etsy, Hood, Shpock, booklooker, and others to hand over the seller’s data to the tax office “, says Lohi’s announcement of January 31. This also affects private providers who earn a few euros on the side by selling used things. Now, is it risky to clean out your basement and sell your old record collection on eBay? The Lohi clarifies and describes what tax consequences may arise.
Ebay and Co: Sales platforms have to pass on data to the tax office
“The aim of the new law is more transparency for transactions on the Internet. Therefore, the sales platforms are legally obliged to provide the tax authorities with information on the providers and their sales,” explains Lohi on the legal situation. “The seller’s name, date of birth, address, tax identification numbers and the registered bank details, if available, passed on. Furthermore, all transactions after January 1st, 2023 will be disclosed with the respective sales prices, fees, or commissions. All data recorded between January 1st and December 31st for the year 2023 would be evaluated centrally by the Federal Central Tax Office in Bonn and distributed to the responsible tax offices at the seller’s place of residence. Thus, the local tax authorities could check “whether income should have been declared in the tax return,” says Lohi.
According to the Lohi, a report must be made if more than 30 sales have been made in a year or if sales of more than 2,000 euros have been generated. This can also be achieved with few sales by selling only three items in one year, such as a high-priced television, the penultimate iPhone model and a used e-bike, the tax experts point out. “If both metrics stay below the threshold, nothing happens.”
Ebay and Co.: What do you have to pay tax as a private seller?
As far as the tax is concerned, Tobias Gerauer from the Bavarian wage tax aid can reassure many private sellers at this point. “If it’s used everyday items, you can sell as much as you want,” he says according to the announcement. Here, private sellers would have nothing to fear from the tax law. “Because it can be assumed that there is no profit in the case of used everyday objects. In other words, these items are usually sold below the original price that the seller once paid for them. It is clear that no profit is made with a T-shirt at a sales price of 2 euros.” Apart from the flow of information from the online platform to the tax office, nothing else is to be feared.
According to Lohi, the situation is different for luxury items: “Jewellery, coins, antiques and art, for example, do not fall under normal everyday objects.” A statutory speculation period of one year applies here. Only then can they be sold tax-free. “Unless the profit stays below 600 euros per year, then tax exemption also applies.”
Tax tricks: How to save money on your tax return?
In the case of a high number of sales, the tax office could sit up and “suspect that it is a matter of covert commercial activity,” says Lohi. In order to be able to defend yourself against unjustified suspicion, a sales diary can help. “With such a sales list, it can be easily proven that no profits were made or, if so, how much. In case of doubt, this can prevent the tax official from estimating the profits and thus the taxation to the detriment of the private provider.”
When does the tax office classify the trade as commercial? According to Lohi, evidence of trade is provided by the sale of several similar items. “If, for example, the same novel is sold five times, it is unbelievable that it was a private collection on the bookshelf,” the statement said. “You should also be careful who sells something for friends or relatives in their name.” Likewise, the regular sale of new goods is “a clear indication”, according to tax experts. Because superfluous items from a private household are only rarely new and unused. According to Lohi, anyone who buys goods in order to resell them is clearly trading commercially: “If, for example, several game consoles are purchased cheaply on Black Friday and then resold at high prices shortly before Christmas, the profit made is usually taxable.”
This article was originally published on Frankfurter Rundschau Germany
