The Platform Tax Transparency Act (PStTG) came into force on 1 January 2023
Platforms Tax Transparency Act (PStTG) –
Is a new wave of tax criminal proceedings on the horizon?
On 1 January 2023, the Platform Tax Transparency Act (in short: PStTG) into force. The legislature is thereby implementing the European DAC7 EU Directive 2021/514 of the Council of 22 March 2021 amending the Directive 2011/16/EU transposing into national law the Directive on administrative cooperation in the field of taxation and on the modernisation of tax procedural law.
The focus here is on transactions carried out via digital platforms. Platforms such as eBay, Airbnb, Amazon and Uber could be cited as examples here.
The scope of application is intended to relate solely to platforms, whereby the term „platform“ is deliberately interpreted broadly in accordance with Section 2 in conjunction with Section 3 of the PStTG. Consequently, the scope covers platform operators within the meaning of Section 3 of the PStTG who facilitate direct legal transactions relating to relevant activities under Section 5 of the PStTG between users and providers as defined in Section 4 of the PStTG. In principle, therefore, the scope covers platforms which facilitate direct legal transactions in the areas of letting, sharing, trade in goods, and the provision and supply of labour, or which facilitate the collection and payment of remuneration associated with a relevant activity, and which have links to Germany or an EU Member State.
Platforms that merely facilitate the possibility of a legal transaction, where the actual, relevant legal transaction is subsequently concluded outside that platform, are not covered. Consequently, activities such as the mere processing of payments, listing, advertising of relevant activities or redirection to other platforms do not fall within the scope of application.
In principle, the following are therefore not platforms within the meaning of Section 3 of the PStTG:
- Job boards
- Search engines
- Price comparison websites
- Recruitment portals
- Online payment services
Furthermore, in accordance with. Section 4(5)(4) A provider is classified as a so-called „exempt provider“ if, „during the reporting period, whilst using the same platform, it carried out relevant activities in fewer than 30 instances in accordance with Section 5(1), first sentence, point 3 and who, as a result, received or was credited with less than 2,000 euros in total as remuneration.“
It should be noted that this exemption then applies only to that one relevant activity.
Platform operators may also, by 31 October of any given year, apply for a determination that they are an exempt platform operator for the current reporting period in accordance with. Section 11(1) in conjunction with (4) and (7) apply to the Federal Central Tax Office.
For the first time, reporting platforms must submit a report to the Federal Central Tax Office by 31 January 2024. The Office will then forward the information to the relevant authorities.
The first criminal tax proceedings can therefore be expected between spring and summer 2024.
However, if the relevant tax office makes an enquiry seeking clarification of the facts, the offence has not yet been detected within the meaning of Section 371(2), first sentence, point 2 of the German Fiscal Code (AO) . In this case, it is likely that a voluntary disclosure, which would exempt the person from prosecution, can still be made in respect of the unreported Income from letting and leasing – Section 21 of the Income Tax Act (EStG), Business operations – Section 15 of the Income Tax Act (EStG), private sales under Section 23 of the Income Tax Act (EStG) or other income under Section 22 of the Income Tax Act (EStG).
However, it should be noted that a voluntary disclosure that results in immunity from prosecution is only valid if it is made in accordance with Section 371(1) of the German Fiscal Code (AO) is complete. This includes all instances of tax evasion of the same type for which the limitation period has not yet expired, covering at least the last ten years. In order to make an effective voluntary disclosure that exempts the taxpayer from criminal liability, professional help and advice should be sought.
If you are unsure whether you have declared your income correctly for tax purposes, or if you are concerned that criminal proceedings might be brought against you, our specialist solicitors and tax advisers will be happy to advise you.
We would be happy to advise you on matters relating to criminal tax law, such as whether, for example, the conditions set out in Section 23 of the Income Tax Act (EStG) (Private Disposals) are met or not, or whether the situation constitutes a tax-relevant letting under Section 21 of the Income Tax Act (EStG) or a tax-irrelevant hobby.
Please also read our article on Airbnb
Furthermore, consideration should be given to indicators suggesting commercial operation, and to whether the hardship allowance applies or whether tax allowances/thresholds have been exhausted.