New tax obligations for online marketplaces

New obligations have been introduced in addition to already existing rules, e.g. reporting to tax authorities and to the authorities collecting social security contributions or information obligations vis-à-vis users regarding their social and tax obligations in France.

Annual summary information for the users to be sent by online marketplaces

This declaration had to be submitted for the first time in January 2020 on income generated in 2019.

Each year, platforms must send to their users, before 31 January, a document that summarises the gross amount of transactions of which they have been informed and which they have received through them during the previous year. This document must contain information related to the platform identity, user identity, number and amount of transactions carried out through the platform, etc.

Penalties for non-compliance with the above obligations to provide tax and social information to the users may be up to EUR 50,000. The fine for the first non-compliance is limited to EUR 5,000.

Annual summary document for French tax authorities (FTA)

Online marketplaces must send to the FTA an annual document that summarises all the information provided by their users. This return had to be submitted for the first time in January 2020 on income generated in 2019. The FTA automatically forwards this report to the social security authorities.

This report must contain the same information as the one sent to the users. In principle, it has to be submitted in January N on income generated in N-1.

A sanction mechanism is applied for non-compliance, i.e. a fine of 5% of undeclared amounts for late or incomplete submission.

There is also a “name and shame” sanction by publishing on the Internet the identity of online marketplaces repeatedly not complying with French obligations, which remains online for 1 year respectively and will be withdrawn as soon as the marketplace has paid the outstanding taxes and fines.

Solidarity for VAT payment as of 1 January 2020

The solidarity for payment will concern:

• VAT due by a taxpayer, regardless of where he/she is established (France, another EU Member State, third countries), who uses the online platform to supply goods or services (with place of taxation in France) for the benefit of non-taxable persons;
• VAT due by a person, regardless of his/her place of establishment (France, other EU Member State, third countries), who carries out imports into France via the platform.

The solidarity will be implemented following a 3-step procedure:

• STEP 1: the FTA may report suspicions of a person evading his/her VAT obligations to the operator of the online platform, who must then take “measures to enable the person to regularise his/her situation” and also inform the FTA of measures taken.
• STEP 2: depending on the outcome of step 1, the FTA may issue a formal notice to the platform to take additional measures or, if not, to exclude the person concerned from the online platform. The online marketplace will have to notify the FTA of the measures taken.
• STEP 3: if the above-mentioned measures or exclusion are not implemented after one month from the notification of the additional measures or, in the absence of such notification, from the formal notice of the platform by the FTA, the tax due by the person will be exclusively due by the online marketplace.

Please note that from 1 January 2021 the VAT treatment for sales via online platforms will change, thus the above-mentioned measure will no longer be fully applicable