Can a marketplace with several individual vendors be held responsible (by governments) for VAT collection?

Question

Can a marketplace with several individual vendors be held responsible (by governments) for VAT collection?

Anonymous Mar 21, 2015 3 views 2 answers

We plan to build a fashion marketplace targeting people in Europe (both vendors and customers). Under the marketplace model, the suppliers will add their product, set the price, and ship directly to the customer when an order is placed. They will also send an invoice to the customer, with the product. We simply provide the platform and the payment processing (PayPal collects the money in our PayPal account, after which we keep ONLY our commission and distribute the rest to the vendors' PayPal accounts). We'll make it very clear to the vendors (in our terms and conditions) that the prices they set have to be inclusive of VAT and that they will be responsible for remitting the VAT to the proper authorities. Is there a law that forces the marketplace to collect and remit the VAT itself?

Albert Crosner · Accepted Answer · 2026-06-15T14:00:14+00:00

You (or someone on your behalf) would have to research each country you are participating in to know the answer to your question. That could take some time and money. You could do as you are planning on doing, which is to impose upon each vendor that they are liable for collecting and remitting the value added tax (VAT). Also, you might want to include some wording to the extent that if the vendor does not do so, any payments that you have to make as a result, would be promptly reimbursed to you.

Anthony Cameron · Accepted Answer · 2026-06-15T14:00:14+00:00

Please understand, depending on the number of nations, you are probably talking 50,000 Euro worth of legal and accounting work to protect your marketplace. That's before the code writing to give it effect.

Can a marketplace with several individual vendors be held responsible (by governments) for VAT collection?

Attorney Answers

Browse by Practice Area

Browse by State