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Online platform joint liability for VAT payment

In France, the law relating to the fight against tax and social fraud has established a new system within the French Tax Code (“FTC”), namely articles 283 bis and 293 A ter in the FTC, which implements a joint and several liability regime for online platforms / market places to the payment of VAT due by default operators. Operators in the scope are the ones carrying out, through those platforms, some transactions taxable in France (imports or sales of goods, provision of taxable services in France to or for the benefit of persons not subject to the VAT) if the platform operator has not implemented the measures requested by the administration.

Since when is the joint liability mechanism of payment applicable?

The terms of application of the cooperation mechanism were set by decree CPAE1935691A of 30 December, 2019, and apply since 1 January, 2020.

What are the steps for the cooperation mechanism of payment?

In accordance with the decree of 30 December, 2019 adopted for the application of articles 283 bis and 293 A ter of the FTC, the joint liability mechanism will be implemented in 3 stages:

1. If the tax administration presumes that a user of the platform is in breach of its declarative or VAT payment obligations in France, the administration reports this to the platform, which must take measures so that the user regularizes the situation. The platform must notify the administration of the actions taken against this user.

2. If the presumptions are maintained after a period of one month from either the notification sent by the platform to the administration, or from the initial notification sent from by the administration, the platform will be forced to take additional measures, even if it means excluding the user from their platform. The platform must then again notify the administration of the measures taken against this us er.

3. In the absence of measures or exclusion within a further period of one month, the VAT for which the user is be liable will be jointly and severally charged to the operator of the platform.

Thus, if you sell via online platforms such as Amazon, Cdiscount, or others… you have certainly received these last few months some more strict directives from these platforms regarding your VAT numbers, maybe even your Excise numbers if applicable (if you sell alcoholic drinks for example, the sale of tobacco online being prohibited). While waiting for the future E-Commerce VAT package planned for July 2021, you must ensure the reliability and efficiency of your compliance, otherwise you take the risk to be excluded from those platforms.

EUROTAX, and its expertise of more than 30 years in VAT matters, provides you with services to secure your compliance with the regulations in place within the Member States of the EU.

Please do not hesitate to contact us for more information.

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