French e-commerce rules regarding distance sales of imported goods

By Cécile Natali, FIDAG SARL

The EU’s e-commerce VAT package came into force on 01 July 2021. The new EU rules for cross-border sales of goods to individuals include, notably:

Creation of a scheme for distance sales of imported goods, to effectively capture VAT on sales of goods arriving from outside the EU.

In some cases, electronic interfaces (marketplaces and other platforms) will be deemed to have purchased and sold the goods, even if they never have legal ownership of them, and therefore will be liable for VAT.

When the reform of e-commerce VAT rules was introduced into domestic law, France decided to amend the text relating to persons liable for VAT on imports.

Now, Article 293 A of the French tax code provides, as from 01 July 2021, that VAT must be paid by the taxable person who facilitates, by means of an electronic interface, distance sales of goods imported from third territories or third countries. The final consumer, designated as the recipient of the goods on customs documents, remains jointly and severally liable for import VAT.

This text applies in all cases where a platform facilitates distance sales of imported goods, irrespective of shipment value, excluding shipments of goods with an intrinsic value exceeding EUR 150 which are then delivered to a member state other than France. In other words, platforms are made liable for import VAT on all sales they facilitate, when shipments are delivered to consumers in France.

The objective of this rule is to guarantee VAT payment on goods coming from third countries under the same conditions as if they were coming from the EU (antifraud measure). However, practical implementation is quite complex when the other new EU measure related to electronic interface “buyers/resellers” also applies, since the scope of the two measures do not coincide.

Published: Indirect Taxes Newsletter, No. 12 Autumn 2021 l Photo: AA+W - stock.adobe.com