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

  • VAT
  • 08 September 2014 | Richard Asquith

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

France is to extend its 2% broadcaster levy to non-resident Netflix as tensions mount over its non-resident corporate income tax status.  France had previously attempted to introduce a internet use tax in 2013, but had to withdraw it due to complexities.

This mirrors a similar failed attempt by Italy to tax Google for its non-resident earnings via an advertising VAT levy.

The move to impose the levy on Netflix follows its decision not to open in France, but instead to use its other EU country presences (including Luxembourg and the Netherlands) to provide subscription services to French consumers.  This means it will not be liable to French Corporate Income Taxes.

French Broadcasters' levy

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.

2015 Electronic VAT rule changes

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.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.