Why is the mail order regulation (§ 3c UStG) important for wine merchants with regard to value added tax?
The so-called mail order regulation in Germany according to § 3c UStG states that a mail order company has to pay VAT on the goods it ships to private individuals within the EU in the country where the recipient is located.
This is based on the so-called destination country principle. This is usually implemented in such a way that, in the case of cross-border sales to private individuals within the EU, the consignor (seller) is exempted from VAT in his country for the transaction in question and instead the recipient (buyer) pays tax on an "intra-Community acquisition" in his country. However, this simplified procedure is not permitted for goods subject to excise duty, which also include alcoholic beverages and thus wine.
Therefore, every wine supplier in Germany who delivers to customers in other EU member states is subject to VAT in the respective country of destination. This means that they must first register with the relevant tax authorities in each country to which they intend to ship. He will then receive a separate tax number for the country in question, under which the VAT must be registered and a tax return must also be prepared.
Summarized once again: When selling and shipping to private individuals in other EU countries, the seller is exempt from VAT in Germany according to the destination country principle. Up to a certain delivery threshold (value of goods plus shipping and ancillary costs), the buyer then pays tax on an "intra-Community acquisition" in his country. However, this rule does not apply to wine (because as an alcoholic beverage it is subject to excise duty), so the wine supplier must register for VAT in each EU country to which he wishes to deliver and must also submit a VAT return in each country.