In its ruling of 26 April 2012 V R 2/11, the Federal Fiscal Court (Bundesfinanzhof, BFH) decided that the sale of a large number of consumer goods over several years via the internet platform "ebay" may constitute a sustainable, entrepreneurial activity and thus subject to VAT.
The plaintiff, a partnership under civil law (GbR) consisting of a married couple, sold items of different product groups (inter alia, stamps, dolls, model railways, arts and crafts, writing utensils, porcelain, software, photo articles, carpets) as well as items which could not be assigned to a separate product group via "ebay". From these, she earned approx. DM 2,200 from 16 sales in 2001, approx. € 25,000 from 356 sales in 2002, approx. € 28,000 from 328 sales in 2003, approx. € 21,000 from 226 sales in 2004 and approx. € 35,000 from 287 sales until she ceased her activities in summer 2005. The tax office treated the sales in the years 2003 to 2005 as sustainable and thus entrepreneurial activity. The tax court (Finanzgericht, FG) dismissed the complaint against this.
The BFH answered the fundamental question of whether such sales via "ebay" can constitute an entrepreneurial activity in the affirmative. In doing so, it continued its case law according to which the sustainability of an activity is to be assessed according to the overall picture of the circumstances, whereby a number of different, not conclusively defined criteria are to be assessed. The assessment of the tax court, according to which the present sales activity is sustainable, was possible and therefore not objectionable under the law of review.
However, it was necessary to refer the case back to the Regional Tax Court for a new decision because the findings of the Regional Tax Court were not sufficient to be able to assess whether it was actually the GbR or only the husband who had acted in legal transactions. In addition, the application of the reduced tax rate could be considered for some disposals.
Source: BFH press release
Goldberg Attorneys at Law 2012
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist lawyer for information technology law
E-mail: info@goldberg.de
