Ministry of Finance new roadmap for mandatory e-invoicing, e-commerce platforms and dropshipping reforms
The French Ministry for the Economy and Finance has published a roadmap for a range of measures to combat fraud in public finances. This includes a range of VAT-related measures which the Ministry has estimated as a €20 to €25 billion VAT Gap.
VAT and Customs fraud measures
The roadmap includes a range of measures targeting VAT and customs fraud, including:
- Mandatory E-invoicing starting in July 2024 which it estimates will raise €3 billion per annum by 2027-28. This will help tackle intra-community VAT evasion, false input VAT refunds and improve the efficiency of future tax audits. In the longer term, it will enable the option for prefiled VAT returns. Long term, this will be coordinated with the EU VAT in the Digital Age reforms.
- Upgrades in blockchain technologies to combat digital fraud
- Import VAT rules will be revised in 2024 to tackle VAT and customs evasion by drop shippers. In particular the practise of undeclaring at import the value of the goods as the cost from the supplier and not the price to the consumer.
- Obligations and cooperation protocols for e-commerce platforms to provide more data on customs information for imported consignments. This is around the 2021 e-commerce package IOSS return introduction, and is a measure introduced ahead of 2028 EU customs reforms. Also, more transparency to prevent the sale of prohibited goods.
- New powers for DGFiP (Direction Générale des Finances Publiques, part of the Ministry) to act against marketplaces which do not cooperate on the above measures. This will include powers to require marketplaces to remove suspect sellers from their platforms. There will also be new powers over non-EU resident marketplaces selling to French consumers.
- Customs checks for fulfilment warehouses exploited for rebound sales and fraud .
- More cooperation between DGFiP and the DGDDI with regard to the payment of import duties, particular for the new French import VAT regime