What Should Cross-Border E-Commerce Companies Do When They Receive A Penalty Letter Of VAT Declaration And Payment In France?
For a variety of different reasons, it is possible for cross-border e-commerce companies to receive penalty letters from the French tax authorities. What should they do when they receive one? Cross-border sellers are often overwhelmed by this. If you have already received such official French notifications, this article will answer this important question.
- Retroactively declaring and paying taxes
The official letter you received may just be a friendly reminder that you need to declare or pay the full VAT retroactively within the time limit, in which case you should promptly communicate with your French tax representatives to confirm that whether the declaration has been completed and the tax has been paid. Once it is confirmed, we recommend your French representatives to provide the tax authorities with proof of tax declaration and payment.
- Retroactively paying penalty or applying for special treatment
The official letter you received is about VAT penalties: late declaring or late paying VAT can incur penalties. We have already explained it in the previous article. The percentage of penalty is 5%-10% of the declared tax. If you do not pay tax within 30 days from the day you receive the reminder letter from the French tax authorities, the percentage of penalty will increase to 40%, then up to 80%.
After registering a French VAT number, cross-border sellers who fail to declare VAT for a long time will be required to pay the tax based on the approved tax payable by the French tax authorities. Of course, this amount is an estimate, and is often overwhelming.
You will need to confirm with your French tax representative if there has indeed been a late declaring or payment. Once it is confirmed, you will need to communicate directly with the French tax authorities as soon as possible on what to do. Please note that under no circumstances is it a good idea to ignore this type of letter and delay your response.
For some special cases, cross-border sellers may consider applying to the French tax authorities through your French tax representative for a penalty waiver. For example, if a seller’s register for a VAT number falls during a holiday or a strike, resulting in a serious delay in the issuance of the tax document and fail to complete the monthly declaration on time. If penalties incurred in this case, experienced tax representatives can help sellers to apply for a penalty waiver to avoid financial losses.
If you have a problem similar to the one in the article, please feel free to contact us.
