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E-commerce & French VAT : obligations for companies outside the EU

French VAT registration and the appointment of a tax representative is a necessary step for companies established outside the European Union that import and / or sell their products in France, including through e-commerce platforms.

HOLDING A FRENCH VAT NUMBER VERIFIED AND IMPOSED BY AMAZON

From now on, Amazon and all e-commerce platforms are warning B2C companies established outside the EU to register for VAT as soon as they sell their products to French individuals. In the absence of presentation of a valid VAT number within a certain time, the penalty falls : the seller’s account is simply closed, thus putting an end to its activities.

The intransigence of Amazon is probably due to the adoption, last December, of new VAT rules related to e-commerce. Indeed, it is expected that from January 1, 2021, operators facilitating remote sales via an electronic interface such as a marketplace, a platform, a portal or a similar device will, in some cases, deemed to have received and delivered these goods themselves to individuals. This means that in the case of the seller established outside the EU does not return VAT to the treasury, in particular because if the seller evaded his obligation to identify with VAT, the tax authorities should be able to claim VAT directly to the platform.

AN EXPECTED REINFORCEMENT OF CUSTOMS CONTROLS AND TAX ADMINISTRATION

On 8 March 2018, the European Commission started an infringement procedure against the United Kingdom, accusing it of a lack of surveillance of Chinese imports resulting in the loss of 2.7 billion euros of customs duties. In practice, this involves fraud against the exemption of customs duties and VAT applicable to imported consignments of low value, thus making it possible to introduce goods into the European territory without having a VAT number or tax representative. Accused of distorting the market at the expense of European companies and generating a deficit of several billion euros, this exemption will be removed from January 1, 2021.

The decision of the European Commission will clearly lead to increased vigilance by customs and the tax administration, which will result in more checks.

If you have received a formal notice from Amazon or simply wish to take the lead, contact our tax and customs experts as soon as possible to obtain your VAT number.

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