France marketplace VAT liabilities and split payments
- May 11, 2019 | Richard Asquith
France is proposing to make online marketplaces responsible for the remittance of non-EU merchants’ VAT on certain transactions from 2020. This would be one year ahead of 'deemed supplier' obligations for marketplaces agreed across the rest of the European Union.
The proposal includes a VAT split payment requirement. This would oblige marketplaces facilitating payments for non-EU third party merchants, to separate any VAT due and remit directly to the French tax authorities.
Under EU 2021 reforms, marketplaces which facilitate the sales of non-EU sellers’ transaction will become the deemed supplier for VAT purposes. Typically, this means the seller imports the goods, and is responsible for the import VAT. But if the marketplace then assists in the cross EU border sale, goods transport and collection of money for the seller, then they must take legal ownership of the goods, and collect and remit the VAT on any sale to an EU consumer. The is affected by the merchant selling the goods to the marketplace, and the marketplace then selling the goods to the EU consumer and collecting the VAT.
Note: The EU is also proposing introducing in 2021 a single VAT return filing regime for goods sales, One-Stop-Shop (‘OSS’). This will be available to EU and non-EU tax payers. There will also be an import variation of this, i-OSS, where sellers can declare import VAT on their imports. This is being introduced as the existing €22 import VAT exemption on small parcels is being withdrawn at the same time.
Need a fiscal representative in France?
Non-EU businesses selling in France will need to appoint a fiscal representative alongside completing VAT registration and returns.
Fiscal representatives are responsible for the accurate VAT submissions of their non-EU clients.
Avalara offers a Fiscal Representative Service as part of its international VAT and GST Registration and Returns Service.
Need help with your French VAT compliance?
Researching French VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.