Why Do Cross-Border E-Commerce Companies Receive Penalty Letters From French Tax Authorities?
As a cross-border e-commerce, have you ever received tax reminder letter or penalty letters forwarded to you by your French tax representatives? Why did you receive these types of letters and what should you do about them?
The reminder letters from French tax authorities, which fall into the following categories:
- Relance amiable
When the French tax authority, to which the cross-border e-commerce belongs, detects irregularities in the declaration or payment of VAT numbers, this type of letter will be sent to your tax representative to require the tax representative to correct the violation immediately, and the letter de relance will expressly require your tax representative to resolve the issues within a time limit (typically 30 days). If the cross-border sellers or their tax representatives do not resolve the issues within the time limit, they will then receive a formal administrative notification letter with penalty.
- Mise en demeure
Mise en demeure de payer which is an administrative notification letter with penalty will require cross-border sellers to pay the fixed penalty immediately through their French tax representatives. Generally, the percentage of penalty is between 5% and 10%. If cross-border sellers have not acted upon receipt of the Mise en demeure, the percentage of penalty will be further increased after a certain time limit, up to 80%. The French tax authority will then have the possibility of freezing bank accounts directly through a special reminder department until the tax and penalty are paid in full.
- Relance directe
In some special cases, the tax authority will skip the above reminder process and send a registered letter directly to make reminders and ask immediate payment of the tax payable, such as mount of tax payable (tax and penalty) more than 15,000€ or tax payable after the entry into force of legal proceedings, etc.
The deadline of the French VAT declaration and payment is the 24th of the following month, which is the latest tax declaring deadline among Amazon’s pan-European countries. For sellers, the French authorities allow enough time to calculate the VAT and arrange the payment. At the same time, if your tax representatives perform their duties properly, the above-mentioned tax problems can be avoided.
