France marketplace VAT obligations 2020
- Aug 11, 2019 | Richard Asquith
France is to require online marketplaces to verify the Value Added Tax status of foreign sellers using their platforms from January 2020.
The requirement to co-opt digital platforms to check the VAT registrations of third party merchants will include verifying their VAT numbers. For non-EU sellers, including from the US and China, this means appointing a local French fiscal representative. The tax authorities will also notify the marketplaces of any potential VAT fraud by sellers, and the digital marketplaces will then be expected to immediately block the merchant from their platform.
The marketplaces will also have to start reporting to the tax authorities on transactions made by third-party sellers on their platforms. The first report is due at the end of January 2020, capturing 2019 transactions. The requirements oblige the marketplace to determine if the sellers' transactions are liable to French VAT. This will be a challenge: French-resident sellers can benefit from the VAT registration threshold; and foreign sellers, selling from stocks outside France, can take advantage of the distance selling VAT registration thresholds.
In a new draft decree, this may be extended to report on the local sales in France and the tax on the transactions – ‘turnover subject to VAT’. This means calculating and determining the VAT liability. This may be complex since the marketplace currently does not have all the information for this. For example, is the seller using the distance selling thresholds or where the goods where sourced from.
E-commerce fulfilment houses would be obliged to supply details of their customers VAT imports and VAT responsibilities. Adn the tax authorities will now have the right to maintain a public register of ‘non-cooperative’ marketplaces, failing to follow their VAT and other tax obligations in France.
This is similar to the UK marketplace VAT obligations measure introduced in 2018, which also added a marketplace exchange of VAT data requirement. Germany's marketplace sellers VAT Tax Certificate obligations come into effect from March 2019. Italy's marketplace mandatory quarterly seller reporting begins in October 2019.
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.