Can Cross-Border E-Commerce Companies Pay VAT Directly To The French Tax Authorities?
The French tax representative market has been developing rapidly in recent years, which on the one hand reflects the urgent demand for cross-border e-commerce companies to operate in compliance, and on the other hand has exposed many potential problems, such as the tax representatives who ran away with the money a few years ago. Although it is only a very small number of tax representatives’ violations, it has had an extremely negative impact on the whole industry and has made sellers extra sensitive to tax security issues.
The security of VAT payment is a headache for many cross-border sellers. So how can ensure that your VAT payments reach the French treasury without any complications? There are currently two modes of payment of VAT by French tax representatives:
- The tax representatives only make declarations, and the VAT is paid by sellers to the treasury of the French tax authorities by way of overseas remittance.
For financial security reasons, this method saves the sellers a lot of worry. For the tax representatives, it also eliminates the need to check the bank statements. Many tax representatives are happy with this model, which saves their team member and helps to keep the price of their services low. However, there are also significant drawbacks to this method, such as:
Errors in the amount of the remittance (e.g. fees charged by the transfer platform), incorrect comments or unexpected delays in transferring funds can lead French tax authorities not to identify the payment of e-commerce companies directly. Even if the e-commerce companies have paid, the tax authorities will still alert you that you have not paid taxes on time, then you will not be able to obtain proof of payment and even receive penalty letter. In this case, your French tax representative cannot help you as they are not be involved in your financial settlement with the tax authorities.
Of course, if there are too many similar problems with e-commerce companies serviced by the same tax representative, the French tax authorities will also summon the tax representative directly to require him or her to improve the mode of operation. Otherwise, it may jeopardize their tax representative qualification.
- The sellers transfer the tax to the tax representatives ‘bank account SEPA first. When the tax representatives receive the tax, the tax authorities will issue a collection instruction and receive the payment on the specified date through authorizing to automatically debit the account by tax representative.
The French tax authority stresses that VAT should be paid electronically via SEPA, which means paying automatically through your tax representative’s French bank account. Failure to do so can bring the problems described earlier in this article for the tax authorities. In principle, for not paying the tax via SEPA, the tax authorities are entitled to require the taxpayer to pay a penalty in the proportion of the 0.2% of payable, but with a minimum of 60 euros and a maximum of 150 euros per payment.
Therefore, for cross-border sellers, the key point for tax payment is to choose a reliable French tax representative, rather than controlling the risk by paying taxes directly to the French tax authorities.
Please feel free to contact us if you need a related tax representative service.
