Question 7492 — taxes and duties

Summary

The Government has initiated several actions to respond to the necessary adaptation of taxation to digital commerce. In terms of value added tax (VAT), to ensure that the place of taxation corresponds to the place of final consumption, a tax regime applicable to distance selling was put in place in 1993. This specific regime applies when the goods are shipped or transported by the seller or for his account from another Member State of the European Union to a person not subject to VAT and provides for systematic taxation in the State of destination of the goods as long as the amount of sales made by the same seller to this country exceeds a threshold which was lowered on January 1, 2016 to €35,000 per year. This regime therefore guarantees that, beyond a certain volume of turnover, VAT is not a source of distortions of competition between companies, the amount of VAT owed by the merchant then being identical regardless of the method of distribution of the goods concerned (sale in store or via an Internet site). This regime is also expected to evolve in accordance with Council Directive No. 2017/2455 of December 5, 2017 modifying certain VAT obligations applicable to the provision of services and distance sales of goods. Thus, this directive provides, from January 1, 2019, for the removal of national thresholds and the establishment of a single threshold of €10,000 per year. In addition, from January 1, 2021, compliance with their VAT tax obligations by companies carrying out distance sales of goods will be facilitated by the use of a single online portal allowing them to carry out their declaration and payment procedures. This portal will also be open to companies carrying out distance sales of imported goods for the benefit of consumers in the European Union. Furthermore, this directive provides that market participants who facilitate, through the use of an electronic interface such as a marketplace, a platform, a portal or a similar device, either distance sales of goods imported from third territories or countries third parties contained in shipments with an intrinsic value not exceeding €150, i.e. deliveries of goods made by operators not established in the European Union for the benefit of final consumers, will now be liable for VAT. Finally, it is recalled that, with regard to services provided electronically, VAT has been levied at the consumer's location since January 1, 2015. In terms of taxation of corporate profits, France is mobilizing with its partners, both at the G20 and at the level of the European Union, to correct the differences in taxation currently observed depending on the place of establishment of economic operators. The initiative taken by France with nine Member States during ECOFIN on September 15 and 16, 2017 led the Council to ask the European Commission to propose concrete and operational measures with a view to acting both in the short term and in the long term, in line with the work already undertaken within the European Union in terms of harmonization of corporate tax. Thus, at the request of a group of Member States brought together by France, the Commission proposed, on March 21, 2018, to the European Council a global legislative package intended to reform taxation applying to digital activities within the Union European. This is made up of a first directive establishing, on a provisional basis, a "digital services tax" based on the turnover from certain digital activities of large companies (online advertising, intermediation platform for the sale of goods and services online, sale of data) and a second directive proposing a longer-term solution with a view to imposing the profits made by companies in the digital sector based on the notion of “significant digital presence”. These proposed directives were the subject of initial discussions between the Member States of the European Union. France strongly supports rapid adoption of the first directive. In terms of local direct taxation, the Government is carrying out specific reflection on the commerce sector. Indeed, this activity is today confronted with demographic changes, new consumer behaviors (notably the development of e-commerce), and the arrival of new players which force merchants to adapt their service offering to better meet customer needs. In this context, the Prime Minister entrusted a mission to the General Inspectorate of Finance in order to draw up an inventory of the levies weighing on companies in this sector and to develop proposals with a view to achieving a fairer tax framework between the different forms of commerce and to revitalize the commercial zones of city centers. As such, the mission will examine in particular the methods of imposing the tax on commercial premises (TaSCom) and the relevance of low-yield taxes affecting this sector. The mission will submit its conclusions to the Prime Minister by the end of the first half of 2018. All of these measures appear likely to provide concrete and effective responses to the difficulties mentioned.

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