France to charge 2% Netflix levy following 2015 VAT B2C electronic changes

The levy is charged by the Centre National du Cinéma et de l’Image Animée, and applies to all French domiciled and licensed broadcasters or distributors. In a recent review, the CNC has decided that it will extend to non-resident providers of streaming or download video-on-demand. The most successful provider of this is Netflix, whose European HQ is in Luxembourg. This was based on the forthcoming revision of  EU VAT Directive on selling such services to EU consumers.

The 2015 place of supply changes shifts to country of taxation from where the EU provider is located to where the consumer uses the service. This means charging and collecting the VAT of the country of the consumer. To ease the potential VAT compliance burden on electronic broadcasters etc of having to register in each country, a new Mini One-Stop-Shop (MOSS) is being introduced from 1 January 2015. This will enable providers to instead file their VAT collections for all of the EU in a single return in their home countries.  Their national tax authorities will then redistribute the EU VAT to the appropriate EU member states.

Non-EU providers of broadcast and electronic service have been able to report their European VAT through a single electronic VAT return for many years.