France : the Finance Law has been adopted. News concerning e-sellers

A new status: the facilitating intermediary (art. 147)

The facilitating intermediary concerns the E-Marketplace where private clients shop online (such as Amazon, Ebay, …).

In order to secure the VAT collection, the E-Marketplace will be jointly liable for the VAT due by the non EU supplier selling goods to private individuals in EU.

The E-Marketplace will be deemed to receive the supply from the Non-EU supplier and to sell it to the final customer.

 

Article 256 of the GTC is modified with an extensive definition of distance sales of goods is included :

A clear distinction is made made between “Intra Community distance sales of goods” and “Distance sales of goods imported from third territories or third countries”.(art. 147)

Intra Community distance sales of goods”:

Supplies of goods dispatched or transported by or on behalf of the supplier, including where the supplier intervenes indirectly in the transport or dispatch of the goods, from a Member State other than that in which dispatch or transport of the goods to the customer ends, where the following conditions are met:

a) the supply of goods is carried out for a taxable person, or a non-taxable legal person, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1) or for any other non-taxable person;

b) the goods supplied are neither new means of transport nor goods supplied after assembly or installation, with or without a trial run, by or on behalf of the supplier;

Distance sales of goods imported from third territories or third countries:

Supplies of goods dispatched or transported by or on behalf of the supplier, including where the supplier intervenes indirectly in the transport or dispatch of the goods, from a third territory or third country, to a customer in a Member State, where the following conditions are met:

a) the supply of goods is carried out for a taxable person, or a non-taxable legal person, whose intra-Community acquisitions of goods are not subject to VAT pursuant to Article 3(1) or for any other non-taxable person;

b) the goods supplied are neither new means of transport nor goods supplied after assembly or installation, with or without a trial run, by or on behalf of the supplier.’

 

The implementation of the special IOSS scheme and the responsibility of e-commerce platforms

An electronic interface is also being set up to declare in a single Member State all distance sales of imported goods contained in consignments with an intrinsic value of less than 150€, through the use of an electronic interface such as a marketplace, platform, portal or similar means, that taxable person shall be deemed to have received and supplied those goods himself. For control purposes, the electronic interfaces will also be required to keep a register which must be kept for 10 years in order to enable the Member States where these supplies are taxable to verify that VAT has been correctly paid.

In parallel, in order to make the system for the VAT accountability of electronic online sales interfaces fully effective and to improve the collection of import VAT, it is also planned to make the interface that facilitates the sale of imported goods from third countries to consumers located in France liable for import VAT instead of the person designated as the real recipient of the goods on the import declaration (generally the customer).

 

The e-commerce platforms will be obliged to communicate the vendor’s information to the Tax Administration (art. 148)

E-commerce platforms such as Amazon shall make available to the administration information relating, in particular, to the origin, nature, quantity and ownership of the goods stored when the following conditions are met:

The stored goods have been imported into France or another Member State of the European Union from a third country or territory outside the European Union;

The stored goods are the property of a taxable person who has established his place of business outside the European Union or who, in the absence of such a place of business, has his domicile or habitual residence outside the European Union.

This information shall be kept available to the administration until 31 December of the sixth year following the year in which the import operation took place. The e-commerce platform is required to make every effort to ensure the identity of the owners of the goods. It shall inform the e-sellers by all means of their obligations in terms of VAT in France.

 

Publication of the identity of non-cooperative platform operators (art. 149)

Electronics platforms will no longer be considered as mere intermediaries, but as presumed sellers and resellers.

The Finance Law also announce the creation of a “black list” of fraudulent platforms such as tax havens”. Four criteria have already been established: 1. pay the Gafa tax If the company is liable for it, 2. pay VAT, 3. reply to the tax authorities if requested and 4. transmit the vendors’ (sellers) income.

That is the reason why as from the 1st January 2020, the Marketplaces will have to verify the VAT Status of the foreign merchant hosted (VAT registration, Valid VAT number) and, on tax administration request, block any suspicious supplier. Possible Joint liability (to be confirmed).

 

All the e-sellers, without a valid French VAT number will see their shop shut down. Make sure you are French VAT registered on time, contact our VAT expert.

 

About the author:

Richard MBOME

Richard MBOME

Senior VAT expert

Richard is a senior EU VAT expert. Graduated in 2011 with a Business Law Master’s degree from Paris INSEEC, Richard now has more than 7 years of working experiences in the industry. He knows well the EU Tax & Finance law. He’s leading on the French & German VAT consultants team in ATG Tax Global in Paris.

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ATG Tax Global is an EU VAT consultancy operating out of Paris, France. With over 15 years experience in international tax law, our consultants understand the complexities of managing tax returns abroad. They are well-positioned to fully support you in positioning, preparing and processing your tax returns across the UK, France, Germany and many other major EU countries.

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