AWV reports are about fulfilling reporting obligations to the Deutsche Bundesbank for persons who have payment transactions and capital transactions with non-residents. There are some uncertainties regarding payment methods such as PayPal or transactions on eBay and in connection with Bitcoin. We clarify the consequences of non-reporting and in which situations these are necessary.

At the beginning we clarify the abbreviation AWV. This refers to the Foreign Trade Regulation. This includes regulations on reporting obligations in capital movements and in payment transactions with residents outside German borders. This Regulation therefore regulates parts of external trade. In addition, it is accompanied by the Foreign Trade Act, which is very strongly characterized by European regulations.

If the requirements of the AWV reporting obligation are fulfilled, it applies according to § 67 para. 1 AWV and § 11 AWG to transmit the said facts to the Deutsche Bundesbank. This is because it produces statistical evaluations for the entire foreign trade in order to be able to understand and analyze the capital flows that are related to foreign countries.

2.2.1 Reporting persons

Now it is necessary to distinguish between the persons and the facts in the reporting obligation. The provision regarding AWV reports applies in principle to natural and legal persons who have their residence, residence or company headquarters in Germany. This marks them as so-called resident persons.

2.2.2. Reportable matters

In particular, situations in which payments between non-residents and residents occur are covered by the AWV reporting obligation. Cash payments, international payments by direct debit or even international transfers, which are made in euros, are subject to reporting. It is irrelevant in which direction the money flows, as income and as expenses these are subject to reporting. Nevertheless, there are exceptions to the reporting obligation according to § 67 Abs. 2 AWV:

This includes, which is mainly relevant for most individuals and merchants, the exemption for payments above 12,500 euros or whose value in other currencies exceeds 12,500 euros. There is no restriction on the reduction of a payment into several smaller ones, but this method of circumventing the reporting obligation is not advisable. Because the Bundesbank basically cumulates all payments within one month to check an overrun. If foreign exchange transactions are made, the reporting obligation increases to a sum of 50,000 euros.

Furthermore, payments for goods imports and goods exports are excluded from the reporting obligation. Because the export declarations at customs have already been recorded. In addition, an exception also applies to loans with a term of less than 12 months. Because this would blur the annual statistics, since they are already repaid within one year. In addition, overnight deposits or fixed deposits at foreign banks are irrelevant up to a term of one year.

Furthermore, the time frame of the reporting obligation must be adhered to, because if the registration takes place after the 7th calendar day of the following month, it is deemed to be late. Entrepreneurs must first register in order to be able to execute the notification. Dementgegen is enough for private individuals a simple call.

Now there are basic regulations for banks regarding transactions that go abroad and come from abroad. This also includes the notification to all customers that an AWV report to the Bundesbank must be independently checked. This is a warning that banks are evading responsibility. Because each account holder must research these transactions themselves and report higher transactions. However, this is not at all bad, since no legal consequences of a tax nature result from the sole amount, rather it depends on the nature of the transaction.

Since AWV messages are quickly forgotten, precise processes should be defined for who and when to perform them. Because if the reporting obligation is not respected, penalties of up to 30,000 euros can be incurred, since the simple forgetting is classified as an administrative offence. However, this can be circumvented by correct self-disclosure, as also works in tax evasion. This should not be addressed to the Bundesbank.

Final we will go into special cases of AWV reports. This includes, for example, payments via PayPal, eBay or Bitcoins. The latter are a special case, as crypto exchanges are often located outside Germany. This may result in an AWV notification obligation by depositing money in crypto wallets, although it is also partially assumed that these are only simple transfers between two bank accounts. This will require further clarification in future.

PayPal plays a role in which country the business partner of the transactions comes from. Because here it does not depend on where PayPal has its location, as entrepreneurs or private individuals partially suspect. But only the character of the transfer, i.e. whether it is domestic or from abroad, is the decisive challenge. This is different in the case of transactions via eBay, since here, even in the case of a trade with a foreign business partner, trade in goods is often carried out. As already mentioned, this is excluded from the AWV reporting obligation.

Additional cases are donations abroad, as well as payments for advertising to foreign companies, such as Google Ads. In addition, services are also subject to reporting, whereby freelancers and freelancers may also be subject to this. In addition, we also consider dividends, which from abroad can also be a special topic at AWV reports. Because if they exceed the exemption limit, then the gross amount, i.e. the dividend less the domestic withholding tax and less the foreign withholding tax must be reported. Finally, a note applies to all tax consultants, because they are also obliged to submit an AWV report for foreign mandates just as you must additionally submit this for your foreign client.