Several liability to the payment of VAT for online platform operators: opening of a public consultation regarding new French tax administration guidelines

The French tax administration published on 23 March 2020 its official guidelines relating to the new several liability procedure to the payment of VAT, for online platform operators. A public consultation is open to all interested parties, including obviously all the online platform operators.

As a reminder, since 1st January 2020, articles 283 bis and 293 A ter of the French Tax Code have been ruling a several liability mechanism between the taxable persons / users of the platform and the online platform’s operators, through which these taxable persons carry out a business activity. 

The aim of the mechanism is to seek cooperation from the platforms’ operators, in view of stopping the users who fail to comply with their VAT reporting obligations and, the case may be, to force the platforms to contribute to the termination of the defaulted users’ activity.

In the situations where the online platforms would fail to meet the expectations of the French tax authorities, they could then be seeked for payment of VAT liabilities due by the platform users, as a result of the joint liability created between the online platform and the defaulted platforms users.

The introduction of this mechanism comes in addition to the reporting obligations already laying on the operators, regarding the transactions performed through their platforms (French Tax Code, art. 242 bis). It will therefore probably require additional procedural adjustments from platform operators that may have already invested in that matter significantly in order to be compliant with French requirements.

The public consultation should enable to highlight all the technical issues raised by this new mechanism. At this stage, the determination of the period covered by the implementation of the several liability, or the procedural rules envisaged by the tax administration, may raise questions.

Besides, it can be anticipated that this will lead the platform operators to update their contractual arrangements, within the organization of their general terms of use.

We hereby put at the disposal of the blog readers a free translation in English of the comments issued by the French tax authorities.

Our firm will organize discussion sessions with operators in order to structure relevant responses to the consultation opened by the tax administration (we remind that the public consultation is opened from March 23rd to May 31st, 2020).

Vanessa Irigoyen

With more than 16 years of experience, Vanessa has extensive expertise in the implementation of international efficiency business models for customs, export control and indirect tax purposes. Her functions notably […]

Bertrand Jeannin

Bertrand Jeannin, Partner, supplies strategic and technical advice to French and foreign multinational groups in all aspects of their VAT and customs policies. Major focuses of Bertrand’s input involve the […]

Nicolas Kazandjian

Barrister registered with the Hauts-de-Seine Bar, he started my career in the indirect tax service line of Deloitte Taj in 1999. My current position is Director. My area of expertise […]