On January 7th the French tax authorities published new guidelines on the legislative changes to tackle VAT fraud. The changes will target both EU and non-EU sellers avoiding their fiscal obligations in France using digital marketplaces / Ecommerce platforms such as eBay, Amazon and Alibaba.
Digital marketplaces are now obliged to inform all sellers of their VAT obligations on sales made in France. They are also obliged to advise on where to find the correct information via links to the official websites of the tax authorities.
Furthermore, the digital marketplaces must provide an annual report containing information about all French sales. The report must contain information such as the number of sales transactions, total gross amount, identification and contact details of the marketplace and the seller. If available, the bank details where the funds are transferred to, must be included too. The report must be sent to both the tax authorities and the seller.
The first annual report is due by January 31st. 2020 and should include the 2019 transactions.
On the basis, of these guidelines and information flow the French authorities will have full transparency on the online selling to fight VAT fraudsters. The French tax authorities can then flag a suspicious seller to the digital marketplace. They will then be responsible for taking appropriate measures against the presumed fraudster and demonstrate evidence of actions taken. The French authorities can consider the digital marketplace to be jointly liable for the estimated VAT due.
