1. Main types of taxes applied to e-commerce in Germany
In e-commerce (online shops, Amazon, eBay, Etsy, Shopify, etc.), several types of taxes may apply, depending on your legal form and level of profit.
Type of tax – what it is charged on – who pays it
Einkommensteuer (income tax)
Charged on: Net profit from the business activity
Paid by: Individuals, e.g. sole traders (Einzelunternehmer)
Körperschaftsteuer (corporation tax)
Charged on: Profits of corporations
Paid by: Companies only, e.g. UG (haftungsbeschränkt), GmbH
Gewerbesteuer (trade tax)
Charged on: Commercial profits
Paid by: Every commercial business
For sole traders and partnerships, there is a tax-free threshold of €24,500 profit per year.
Umsatzsteuer / Mehrwertsteuer (VAT)
Charged on: Each taxable sale within Germany or the EU
Economically borne by: Customers (as part of the price)
Collected and remitted by: The business, which must charge VAT and pay it over to the tax office.
2. Do you have to register with the Finanzamt (tax office)?
Yes, always, if you are selling online on a regular basis.
As soon as you start selling products or services regularly via the internet with the intention to make a profit, you are generally considered to be running a business. You must:
Register a business (Gewerbe anmelden)
With your local trade office (Gewerbeamt).
Register with the tax office (Finanzamt)
By completing the form
“Fragebogen zur steuerlichen Erfassung” (questionnaire for tax registration)
Usually submitted online via ELSTER (elster.de).
After that, you will receive your tax number and, if necessary, a VAT ID (USt-IdNr.).
3. How are taxes calculated for online shops?
Your VAT obligations depend on your annual revenue and where your customers are based.
Situation – what you must do
Annual turnover < €22,000 (previous year)
→ You can opt to be treated as a Kleinunternehmer (small business) under § 19 UStG.
You do not charge VAT on your invoices.
You do not pay VAT to the tax office.
In return, you cannot reclaim input VAT on your own expenses.
Annual turnover > €22,000 (and typically > €50,000 in the current year)
→ You become a regular VAT-liable business.
You must charge 19% (standard rate) or 7% (reduced rate for certain goods) on your sales.
You must submit VAT returns (Umsatzsteuer-Voranmeldungen) and pay the collected VAT to the tax office.
Selling to private customers in other EU countries
→ You may need to use the OSS scheme (One Stop Shop) or register directly in the customer’s country, depending on thresholds and sales volume.
The OSS scheme lets you declare and pay VAT due in multiple EU countries via a single return in Germany.
Selling to customers outside the EU (third countries)
→ These transactions may qualify as export supplies (Ausfuhrlieferungen), which are zero-rated for VAT.
However, specific documentation and proof of export are required.
The basic formula for calculating taxable profit is:
Profit = revenue – business expenses
Revenue: all income from your sales (your shop, Amazon, eBay, Etsy, Shopify, etc.)
Business expenses: e.g. purchase of goods, shipping, platform fees, advertising, hosting, software subscriptions, office costs, tax advisory fees, etc.
Tax on this profit depends on your legal form:
Sole traders / partnerships: pay Einkommensteuer (income tax) on the profit.
Companies (UG/GmbH): pay Körperschaftsteuer (corporation tax) on the profit.
In addition, Gewerbesteuer (trade tax) may apply.
4. Are sales via Amazon, eBay, Etsy, Shopify considered taxable e-commerce?
Yes, absolutely.
It does not matter whether you sell via:
Amazon,
eBay,
Etsy,
Shopify,
or your own online shop.
What matters is your intention to make a profit (Gewinnerzielungsabsicht).
If you act with the aim of generating profit:
Your activity is considered a taxable business.
Even small or irregular sales can be deemed commercial if they are made systematically.
You should register your business, register with the tax office, and declare all income properly.
5. Key points to watch out for in e-commerce
Point – explanation
Invoices
Must comply with German VAT and invoicing requirements, including all mandatory information (name, address, tax number or VAT ID, invoice date, consecutive invoice number, VAT rate, VAT amount, etc.).
Record-keeping
You are obliged to keep your business records and documents (including digital records) for 10 years, in line with the GoBD rules (principles for proper bookkeeping and data storage).
OSS (One Stop Shop)
Important if you sell to private customers across the EU.
It simplifies VAT compliance in the EU by allowing centralised reporting.
Documentation of digital transactions
You should use reliable accounting software or appropriate e-commerce / ERP tools to record, store and manage all transactions correctly.
6. Smart ways to reduce your tax burden legally
Deduct all legitimate business expenses
Hosting, domains, online ads (Google Ads, Meta Ads, TikTok, influencers), shipping, packaging, software tools, professional product photos, consulting, etc.
Use the Kleinunternehmer scheme in the early phase
If your sales are still low, being treated as a Kleinunternehmer can reduce administrative effort and allow you to work with VAT-inclusive prices without separately charging VAT.
Work with a tax adviser (Steuerberater)
Especially recommended when you start to grow,
sell to multiple EU countries, or use the OSS scheme.
7. Important German terms
Onlinehandel – e-commerce / online trade
Umsatzsteuer / Mehrwertsteuer – VAT (value added tax)
OSS-Verfahren (One Stop Shop) – EU-wide simplified VAT procedure for cross-border B2C sales
Gewerbesteuer – trade tax on commercial profits
Körperschaftsteuer – corporation tax on company profits (UG/GmbH)
ELSTER – official online tax portal of the German tax administration
Editorial note
The editorial team of this website works hard to provide accurate information based on in-depth research and consultation of multiple sources. Nevertheless, errors or uncertainties can never be completely ruled out, and rules and thresholds may change over time.
Therefore, please treat this article as a first, non-binding guide only and always contact the relevant authorities or a qualified tax adviser (e.g. your local Finanzamt, a Steuerberater) for definitive and up-to-date information.
