A proxy is a person or organization authorized by an official power of attorney to perform specific tasks on behalf of another person. This power of attorney is a written document that confirms that the person or organization in question (your proxy) may act on your behalf. In most countries, any natural or legal person who is resident in the country in question, has a local address and has been appointed by means of a notarized power of attorney can act as proxy.

The search for a suitable proxy can be complicated. We offer a licensing service, through which we can take care of all of the compliance in the respective countries for you.

For shipping to certain countries, including Austria, Slovenia, Portugal, Greece and Slovakia, it is necessary to appoint an authorized representative. Let’s take a closer look at the requirements in these countries.

Austria

Since the Packaging Ordinance in Austria was updated on January 1, 2023, retailers who do not have a place of business in Austria must appoint an authorized representative for shipments to this country. This regulation affects you if you deliver packaging materials to consumers in Austria. As a foreign company, you must ensure through your authorized representative that you comply with the requirements of the Austrian Packaging Ordinance. Since January 1, 2023, it is no longer possible for companies that are not based in Austria to carry out licensing independently.

Required Measures:

• Appointment of an authorized representative in Austria.
• Keeping records of the packaging materials distributed in Austria.
• Transmission of the packaging quantities to your authorized representative (annually up to 1,500 kg, quarterly up to 20,000 kg, monthly over 20,000 kg).
• Payment of the fees for the authorized representative and for disposal.

Slovenia

In Slovenia, an important regulation based on an amendment to the Environmental Protection Act came into force on April 24, 2021. This regulation, issued by the Slovenian government, stipulates that all foreign companies that sell packaging on the Slovenian market must appoint a local authorized representative. This authorized representative is then responsible for ensuring compliance with the take-back obligations. This regulation applies regardless of the quantity of packaging put into circulation. Please note that an additional environmental levy must be paid from an annual quantity of 15 tons.

Required Measures:

• Appointment of an authorized representative in Slovenia.
• Keep accounts of the packaging quantities put into circulation in Slovenia.
• Quarterly reporting of packaging quantities to the authorized representative.
• Payment of disposal fees (licensing) and fees for the authorized representative.

Portugal

In Portugal, the environmental authority APA has tightened the regulations on packaging with effect from January 1, 2022 by introducing the mandatory appointment of an authorized representative for all packaging. This regulation particularly affects non-Portuguese manufacturers who sell their products directly to private end consumers in Portugal. In this case, all relevant obligations must be fulfilled by the authorized representative.

Required Measures:

• Appointment of an authorized representative in Portugal.
• Documentation and tracking of the quantities of packaging put into circulation in Portugal.
• Annual reporting of packaging quantities to the authorized representative.
• Payment of the fees incurred for the authorization and for the take-back system.

Greece

A new law came into force in Greece on July 1, 2021, replacing the previous regulations from 2001. Since then, non-Greek retailers who ship goods to Greece are also obliged to register with the Greek take-back system. For companies without a registered office in Greece, the appointment of an authorized representative is also required.

Required Measures:

• Appointment of an authorized representative in Greece.
• Documentation of the quantities of packaging put into circulation in Greece.
• Annual transmission of the packaging quantities to the authorized representative.
• Payment of the costs incurred by the authorized representative and for disposal.

Slovakia

As of January 1, 2022, foreign mail order companies that do not have a registered office in the Slovak Republic must process their obligations via an authorized representative. This authorized representative assumes responsibility for fulfilling all legal obligations and acts on behalf of the trader.

Required Measures:

• Appointment of an authorized representative in Slovakia.
• Documentation of the quantities of packaging placed on the Slovakian market.
• Quarterly reporting of packaging quantities to the authorized representative.
• Payment of the costs incurred by the authorized representative and for disposal.

Spain

A new law came into force in Spain on 27 December 2022, replacing the previous regulations. Since then, foreign traders without a registered office in Spain are obliged to appoint an authorised representative.

Measures required:

• Appointment of an authorised representative in Spain.
• Documentation of the quantities of packaging put into circulation in Spain.
• Annual transmission of the packaging quantities to the authorised representative.
• Payment of the costs incurred by the authorised representative and for disposal.

Packaging legislation remains an important and dynamic topic. The trend of more and more countries requiring the appointment of an authorized representative for foreign distributors is likely to continue. With the constant revision of legislation and the introduction of new control mechanisms in various countries, it remains an area where up-to-date information is crucial. We will continue to update this post to keep you up to date with the latest developments and requirements.

Before the introduction of new rules, online traders who sold their products to other European countries had to regulate VAT according to certain thresholds. These thresholds determined whether the tax was payable in the country of origin or the country of destination of the goods. Each EU member state set its own thresholds, which were usually set at an annual turnover of EUR 35,000 or EUR 100,000.

For example: A German online retailer who sold goods worth more than EUR 35,000 per year to France previously had to register with the French tax office and pay French VAT (20%). If the turnover was below this threshold, German VAT (19%, or at times 16%) was due.

In addition, imports from non-EU countries for goods under EUR 22 were exempt from tax until this date.

Since July 1, 2021, these provisions have largely been replaced by the VAT eCommerce package adopted in 2017 for all EU countries.

Since July 1, 2021, a uniform EU sales threshold of EUR 10,000 (net) per year has replaced the delivery thresholds previously set individually by each EU country. This means that traders who exceed this threshold in an EU country must pay VAT in the respective country of destination.

In addition, traders who previously remained below the individual country turnover thresholds, but who have a total turnover of more than EUR 10,000 (net) throughout the EU, must pay tax on their products for cross-border B2C deliveries in the respective country of destination (for more information on the turnover threshold, see “Threshold regulation 2021“). A pan-European cumulative turnover threshold now applies. If a trader exceeds this threshold, they will be liable to pay tax in all EU countries in which they sell to private consumers. The previous tax exemption for goods under EUR 22 no longer applies, resulting in an increased tax liability for many retailers.

Example 1: A German retailer who sells exclusively to private customers in Spain and generates an EU-wide turnover of over EUR 10,000 must now pay Spanish VAT of 21% – previously it was 19%.

Example 2: If a German retailer sells to private customers in France, Spain and Italy and only exceeds the EUR 10,000 turnover threshold per year in Italy, they will still be liable for VAT in all three countries as the EU-wide threshold has been exceeded.

As VAT rates in EU countries vary between 17% and 27%, this change can significantly increase costs for many traders. To minimize the administrative burden caused by the need to register for VAT in each country of destination, the One-Stop-Shop (OSS) procedure has been introduced.

Until the EU-wide turnover threshold of EUR 10,000 per year is reached, entrepreneurs must pay tax on turnover from sales to other EU countries in the country of origin instead of in the country of destination of the goods.

The regulations relate exclusively to sales generated outside Germany. Only cross-border sales within the EU are taken into account when reaching the EUR 10,000 threshold.

The Mini-One-Stop-Shop scheme (MOSS), introduced in 2015, was expanded to the more comprehensive OSS scheme for e-commerce in 2021. Online traders who exceed the EU-wide turnover threshold of EUR 10,000 can use the OSS procedure to declare their turnover in different countries. All EU-wide B2C sales of goods and services are recorded in the OSS system.

Traders can use this system to settle their entire VAT liability from different countries in a single payment. In Germany, the OSS system is administered by the Federal Central Tax Office, which then forwards the VAT paid to the relevant EU countries.

Participation in the One-Stop-Shop procedure is voluntary for traders, but offers considerable advantages and simplifications, especially for smaller traders. Without the OSS procedure, traders who exceed the turnover threshold would have to appoint a tax consultant or service provider for each destination country in order to fulfill the respective VAT obligations abroad. This would not only result in one-off registration costs, but also ongoing monthly costs. By using the OSS procedure, retailers can avoid this expense and conveniently report all sales online.

The current OSS procedure does not cover all online retail scenarios. Special cases, such as the use of fulfillment services abroad or sales via online marketplaces, cannot yet be fully integrated into the OSS procedure.

One example of this is the sale of a German online retailer via an Amazon program such as Pan EU or CEE. In such cases, the goods are often stored in a fulfillment center abroad, for example in Poland, and shipped to consumers from there. These processes lead to intra-Community transfers and acquisitions (B2B transactions), which cannot yet be mapped in the OSS procedure. In such cases, traders must either register for VAT directly in the destination country if they exceed the EUR 10,000 threshold, or in Germany if their total turnover in the EU is less than EUR 10,000.

The current regulations only apply to B2C sales of goods and services within the European Union. These changes do not apply to transactions with third countries outside the EU. This means that the VAT law of the country of dispatch applies to shipments from the EU to third countries. German VAT law therefore applies to shipments from Germany to non-EU third countries. Here it is particularly important to observe the obligation to provide evidence (further information is available).