Germany’s New Platform Tax Transparency Act: A Problem for eBay Coin Dealers?

The issue has been widely covered by the German media, and there is a great deal of anxiety among coin collectors that they may be targeted by tax authorities in the future. And this concern is quite justified, after all, even hobby collectors can easily reach the exemption limit of 30 sales or a total revenue of €2,000. If you put a couple of 2-euro coins on eBay that feature twice in your collection, you can easily reach 30 sales a year. And if you sell one ounce of gold, you are already over the €2,000 threshold.

No Need to Panic for Genuine Hobby Sellers on eBay

On closer inspection, however, there is in most cases no need to panic for eBay users – after all, there are no changes for most private sellers. In general, it should be borne in mind that the Platform Tax Transparency Act (PStTG) was not invented to prevent people from occasionally selling some of their possessions, just as it happens at a flea market. 

Instead, the Act is aimed at regular and professional dealers that use online platforms of all kinds – including, for example, letting apartments on Airbnb. Those who regularly offer their homes on such platforms without registering this service were already in serious trouble before the Act was adopted. 

And even eBay sellers who pretend to be private individuals but actually use the platform as professionals have always had to fear trouble with the authorities – Germany’s Federal Central Tax Office has been searching the most popular online marketplaces for many years using a software called Xpider to track down commercial dealers. In addition, there is the risk of receiving a cease-and-desist letter from “real” dealers due to a possible distortion of their competitive position.

What is new is the obligation for platform operators to routinely report their users to the tax authorities when certain exemption limits are exceeded. According to eBay, this happened for the first time in January 2024 and the platform plans to submit the previous year’s data in January each year from now on. This will include the total revenue from all transactions in the previous year, less selling fees, refunds and other charges. The platform will also report personal data, bank account details and tax identification numbers. This is to ensure that users with multiple eBay accounts are properly reported.

When Will the Tax Office Take Action?

By transmitting the data, eBay and the like have fulfilled their obligations under the Platform Transparency Act. It is then up to the tax authorities – more precisely, the Federal Central Tax Office – to decide what happens next. This is where the data from eBay, Airbnb and so on is reported. The Federal Central Tax Office then forwards the data to the competent local tax authority.

It may well depend on the tax office what tax officials do with the collected data. Several tax offices have already announced that they simply do not have the human resources to sift through all these documents in order to find tax-relevant cases. Moreover, tax offices that do make the effort are likely to ask the taxpayers concerned to declare their income first.

In most cases, this is when the work starts for both tax officials and taxpayers. Receipts for the items sold must be presented and tables will be drawn up listing all sales, the time of original purchase and the original purchase price. If you have done your homework and can provide full documentation of your eBay sales, there is no reason to worry – you can simply wait and see whether the taxman really takes the trouble to check the documents or whether he spends his time on more serious cases. 

However, the risk of getting caught increases for those who run their eBay account as a regular business but are not registered as such – the more absurd and obvious their illegal transactions are, the more likely it is for tax authorities to take a close look and ask uncomfortable questions. 

Beware of Speculative Gains and VAT Liability

In general, there are several principles to be observed when it comes to the taxation of privately sold collectibles such as coins, which do not necessarily have anything to do with the requirements of the new Act. On the one hand, it must be checked whether the resale took place within a “speculation period” of one year. 

In this case, this speculative gain must be declared in the tax return and taxed at the individual’s income tax rate – unless the gain is less than €600. Although this threshold is likely to be reached for many coins, most collectors will hold coins for more than a year before they part with a piece from their collection – in which case they can realise this gain tax free. 

Problems arise only if there are regular sales – this could give rise to suspicions that the activity is commercial rather than private. In this case, sellers have the same rights and obligations as normal coin dealers: they must provide a proper legal notice on the Internet, including a cancellation policy, pay VAT and vouch for the authenticity of the coins they offer. 

It is very difficult to check whether an activity is of commercial nature because there are no binding rules governing this process. According to German law, any activity carried out with the intention of making a profit qualifies as a commercial activity – so even if someone is constantly selling coins at a loss, they are still commercial dealers. And it is not just the frequency of sales that matters, but also the nature of the goods: if you are constantly selling new coin sets or the same €2-euro coins over and over again, you can hardly claim that you are simply getting rid of a few old pieces from your personal collection. 

eBay Offers Free Advice

On the face of it, there should be no cause for concern for most coin collectors who are mainly hobbyists and sell individual pieces from their collection on an occasional basis. And yet there is a great deal of uncertainty. eBay is offering free advice to its users and regularly organises webinars with tax bloggers. In an interview with the “Graded Moments” podcast, Tilman Kuhla, Legal Director at eBay Germany, offered a simple explanation: “I would ask myself very honestly: am I doing this to make a profit or because it’s a hobby?” According to Kuhla, most users who are currently concerned have no reason to be.

The tax adviser “Steuern mit Kopf”, who offers individual advice to eBay users at the platform’s expense, clarifies: “One of the aims of the Act is to identify cases of tax avoidance. However, this does not mean that you have to pay tax on your private sales. The private sale of personal items on eBay, for example when you sort out old items, does not lead to an obligation to pay tax in Germany.” Oliver Klinck, head of eBay Germany, pointed out in an interview with the Hamburger Abendblatt newspaper in November 2023: “You usually don’t make a profit in a commercial sense of the word when you sell things from your basement or the back of your cupboard.” 

There is also an important restriction, as the top eBay lawyer Tilmann Kuhla repeatedly emphasised: The first reporting round in 2023 only concerned eBay accounts that were activated after the Act came into force, i.e. from 1 January 2023. All other eBay users, whose accounts were set up before 2023, will be spared for the time being – they must be prepared for their sales from 2024 to be reported for the first time next year.