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Shopping on your cell phone: Anyone who makes a profit from sales may be subject to tax

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loveshiba / iStockphoto / Getty Images

They have just cleared out the basement and successfully sold children's laundry, children's toys, the old Ikea shelves and then their daughter's teenage desk. And now the tax office comes and asks. It can't be possible, you think? But it can be. But you probably don't have to pay taxes. Why not? Further down!

Her best friend occasionally rents out her apartment on Airbnb while she is in the Canary Islands. She also gets mail from the tax office. And she might have to pay taxes.

In both cases it is about the so-called Platform Tax Transparency Act (PSTG). But what is that exactly? And how do you avoid unnecessary trouble with the tax office?

Selling your old things at the flea market, classified ads, Ebay or Vinted is not only great because there is finally space in the apartment again. It is also ecological because children's laundry and Ikea shelves are put to a second use. And financially sensible because you still get a little money for it. It is also tax-free. Because you usually bought shelves or clothes for more money than you can sell the things again.

Why the law exists

So why the Platform Tax Transparency Act? The reasoning is actually quite simple: the law does not generate any new tax revenue, but it does give the tax administration a better control instrument for booming online trade. So far, the state has used so-called crawlers on the Internet to find out those dealers who have made the sale of used goods or the temporary rental of private apartments their business model. Tax officials used the web crawler “Xpider” to track down bootleggers. 100,000 websites are said to have been plowed through every day for tax-relevant business activities.

Platforms such as Ebay, Vinted, Kleinanzeigen.de and Airbnb should now report their active sellers or landlords to the Federal Central Tax Office. The Federal Central Tax Office also states that the regular sale of animals on such a platform would have to be reported. This means that the seller data is available to the tax offices - but also to the job center and customs. The deadline for 2023 reports ends at the end of March 2024.

At the beginning of the decade, the EU institutions realized that a huge amount of business was being carried out on these online platforms, for which taxes might also have been due under existing laws. “Tax rules are not always complied with and the amount of unreported income is significant,” says the relevant EU directive. Seen in this way, the whole thing works like an organized black market.

So the EU created a tool to search for online retailers and landlords who actually have to pay taxes. And because such an electronic grid to combat the black market should be simple, it is written directly into the law when you end up in the dragnet network: If you have sold something on a platform more than 30 times in a year or earned more than 2,000 euros. The platform must then report you to the Federal Central Tax Office. And your local tax office can check there. By the way, it is enough if you only tear one of the two boundaries.

The numbers 30 and 2000 are per platform - and if you sell a total of 20 IKEA shelves to one person in one day, that only counts as one sale. If you rented out your apartment on Norderney or in Berlin-Neukölln over New Year's Eve and New Year's Day because you want or hate the hustle and bustle of New Year's Eve, you have made two statements - one for 2023 and one for 2024. If they remain under 2000 euros each, the platform has to pay you Do not get intouch .

Even if you place an ad on a platform, find customers and then sell privately, not through the platform, the platform does not count it and does not report you. If a platform reports you, you will usually also receive a notice. This is true because the platform has to report your tax identification number in addition to your name, address, number of sales and income. And often she doesn't have that at all. In addition, the platforms even face fines if sellers who do not have to be reported under the law are reported to the Federal Central Office.

Most of the time you can get away with no taxes

Let's assume that the platform, for example Amazon, Momox or Facebook Marketplace, reported you. That doesn't mean you have to pay taxes now.

Four examples:

  • They inherited a basement full of old books and furniture from their late father and sell them on platforms such as classifieds or Momox. Much more than 30 sales. But the whole thing is completely unproblematic because you inherited the things and when you inherited this as a child, an allowance for household goods of 41,000 euros was not taxable at all. However, you should be able to document that the furniture and books were heirlooms.

  • With his consent, they sell their son's teenage room, his game console and all his school books. Your son never wanted to see her again. 30 sales come together so quickly, possibly 2000 euros too. But you have the receipt for the youth room furnishings that you paid for. The receipt for the Christmas present console and of course the prices for the school books. Your proceeds are far below the purchase prices and are therefore not subject to tax. To be able to say this in a relaxed manner, it is best if you can document all sales: with the date of sale, sales price, the price for which you once purchased the item and any sales fees. If the tax office comes to you later, you can provide evidence of everything. The state finance administration of North Rhine-Westphalia also generally points out that "occasional (...sales) of worn clothing, used books, used interior furnishings (...) are not subject to tax."

  • A little more complicated: You are a member of an old breastfeeding group and your friends have noticed that you are particularly adept at selling children's clothes, for example on Vinted. They get the things from the other mothers and then pay them the proceeds. Even though all of these children's clothes were proven to be more expensive when bought than when sold, they ended up on the tax office's radar. However, you probably don't have to pay taxes because you didn't make any profits. The crux of the matter: In case of doubt, you have to prove that you were given the children's things and paid the sales proceeds to the other mothers, i.e. that you were not paid for the sales activity.

  • Your friend has sublet her city apartment on Airbnb for 2,000 euros a month and is in the Canary Islands for three months in the winter. Of course, Airbnb reports it – with income of 6,000 euros. The costs are deducted from this, as the girlfriend still has to pay her own rent. There are additional costs, perhaps also the cost of the kitchen table destroyed by the subtenants. But there is still a profit of 2500 euros left. The girlfriend has to pay taxes for them. The girlfriend could have only pocketed 520 euros in rental income without having to declare it on her taxes. However, any additional income belongs in the tax return.

more on the subject

Popular platforms in transition: How Ebay and classifieds challenge each other By Markus Böhm

When do you have to pay taxes?

The tax rules that apply to any profits from sales already applied before the PSTG and of course also apply if you sell in cash at a flea market in addition to the platforms, for example.

You generally have to pay taxes on profits from private sales transactions. But only “if the period between purchase and sale is less than a year,” writes the NRW tax administration. You can also make a profit of up to 599 euros per year, until then everything is tax-free. You have to tax everything from 600 euros. As an employee or civil servant, you can also earn additional income of 410 euros tax-free.

If you earn significantly more, sales tax, or VAT in everyday language, may still be due. Anyone who has already made sales of more than 22,000 euros in 2023 and is expected to achieve more than 50,000 euros in the current year is not only subject to income tax, but also has to pay sales tax. Below these amounts, you can apply for the small business regulation at the tax office for sales tax.

For winnings of more than 24,500 euros, trade tax is added on top.

Speaking of business: If you generate sales and profits as above, you should register a business. If you meet one of the following criteria, the tax office may suspect that you are running a business without registering it. And it will follow up on this, for example if it:

  • establishes consistently recurring and sustained sales;

  • registered the purchase of items for resale;

  • observed the sale of home-made items;

  • sees a sale over a longer period of time;

  • or there are several items or similar goods on offer.

  • Then you may have to pay additional taxes.

In addition, as a trader you have to guarantee the sale if the item you are selling breaks. Normally two years, for used goods only one year.

But at least those of you, dear readers, who sell used items will really be traders, I think.