Remote sales error correction
01/12/2021: VAT - Distance selling regime - Regularization of errors made by French operators - Rescript
Since July 1, 2021, with the reform of the distance selling regime, some French companies have wrongly applied French VAT on their sales.
The tax authorities have just clarified the procedure for regularizing this VAT (BOFiP News, 01/12/2021).
Indeed, it should be recalled that companies located in the EU and selling goods to individuals and non-taxable persons located in another EU Member State must collect VAT at the rate applicable in the country where they are established, up to a certain threshold.
These ceilings were set at EUR 35,000 or EUR 100,000 depending on the country of destination.
For transactions carried out from July 1, 2021, these distance selling thresholds have been harmonized at €10,000 per year throughout the EU.
Thus, a French company making sales of less than €10,000 per year to individuals or non-taxable persons from other EU Member States must submit these transactions to French VAT.
If this threshold is exceeded, the VAT rate of the destination country must be applied.
In this case, the French company can regularize its situation on the one-stop shop ("OSS-IOSS" One-Stop-Shop - Import One-Stop-Shop) by making its declaration and payment of VAT, corresponding to the case where it had mistakenly continued to apply the old threshold.
The company can also identify itself for VAT purposes in the destination country and file a VAT return there, declaring and paying the VAT due on distance sales in the country concerned.
As a result of this reform, French operators were able to wrongly charge French VAT on all their sales to individuals located in another Member State because they mistakenly continued to apply the old thresholds.
If they regularize their situation in the country of destination, these companies find themselves in a situation of double taxation because they have paid French VAT to the Treasury as well.
In an order issued on December 1, 2021, the tax authorities specified that these operators will be able to submit claims for refund of value added tax unduly collected in France, provided that they are accompanied by convincing evidence for these distance selling transactions as well as proof of payment of the tax in France and abroad.
The Administration specifies that, taking into account the different collection periods in the different Member States, automatic relief procedures can be implemented (article R 211-1 LPF).
Thus, when the operator can prove double taxation of the same transaction, the deadline for requesting legalization may be longer than that provided for by the legislation (until December 31 of the year following the payment of VAT).
The foreign tax authorities will also be informed of the deduction made in France.
The stakes can be very significant for companies.
e-VATplus proposes to accompany you in this process.
Our experts can audit your situation, evaluate the impact of these double payments and formalize your requests for refunds with the French authorities.