VAT collection

You are NOT affected by this reform if you are: A merchant residing in the European Union and shipping products from the EU only.

As of July ¹, 2021, we will collect VAT on your behalf if you are:

• A merchant residing outside the European Union (regardless of whether your products are stored in the EU or not)
• A merchant shipping products from a country outside the European Union, even if you reside within the EU.

We will collect VAT on behalf of the sellers mentioned in the previous question.

Nous la déduirons ensuite des montants que nous leur reverserons (en même temps et de la même façon que la commission). Afin de nous permettre de calculer la TVA, vous devrez indiquer le lieu d’expédition habituel de vos colis dans vos préférences vendeurs et le reconfirmer pour chaque commande.

Abolition of the €22 import threshold: VAT will be collected from the first euro.

Aucun colis ne passera la douane sans indication du redevable de la TVA. Vous devrez indiquer clairement sur les documents douaniers et sur le colis le numéro de TVA que nous vous remettrons afin de permettre le dédouanement.

For parcels originating from a country outside the EU: a customs declaration will always be required.

Customs authorities will perform consistency checks between the customs values you declare and the VAT bases we declare.

Since July 1, 2021, new VAT rules have been in effect, resulting in platforms like Rakuten becoming directly liable for VAT on a number of transactions carried out by sellers.

This new liability for Rakuten is also accompanied by several other important changes:

• Abolition of the VAT exemption for imported goods with a value of less than 22 euros;
• Standardization of the intra-community distance selling regime, with taxation in the Member State of destination for goods exceeding a global turnover threshold of 10,000 euros (calculated across all European Union Member States), which should result in VAT being due much more frequently in the Member State of destination.
• Creation of a new “distance sales of imported goods” regime, which targets the delivery of goods with a value of less than 150 euros imported from a country outside the European Union and delivered directly to a private customer within the European Union.

VAT reporting and payment obligations relating to intra-community distance sales and distance sales of imported goods can be fulfilled, upon option, via online portals (“OSS” and “IOSS” portals).

To this end, Rakuten, which is notably registered with the IOSS portal, provides sellers with its IOSS number in cases of distance sales of imported goods for which Rakuten is liable for VAT, in order to prevent VAT from being collected upon the importation of the goods into Europe.

A taxable person for VAT purposes is an individual or entity that carries out an economic activity on an independent and regular basis:

• Carrying out an economic activity on a regular basis: this covers all activities of a producer, trader, or service provider (including professional, agricultural, or civil activities) that are not performed on an occasional basis.
• Independently: the person must not be under a relationship of subordination; they must carry out the economic activity under their own responsibility (for example, an employee cannot be a taxable person).

A taxable person who makes sales as part of their economic activity is in principle subject to VAT: they must collect VAT from their customers (i.e., by adding VAT to their invoice) and remit it to the Treasury.

For example, if your business consists of acquiring stocks of mobile phones from manufacturers and then selling them daily to individual customers, you should likely be classified as a VAT-taxable person. Conversely, if you are an individual who occasionally resells a used dishwasher, you should not be classified as a taxable person for that transaction.

Determination of the State in which you are established:

In principle, the State in which you are established corresponds to the State where you have the seat of your economic activity. The location of the economic seat is assessed based on a set of indicators (e.g., location of the registered office, place where directors meet, location of financial activities, etc.). In case of doubt, the place of the seat of your economic activity is fixed at the place where the essential decisions concerning the management of your business are adopted. Conversely, a mere mailbox in a State does not allow for the seat of economic activity to be located there.

By way of exception, for a given transaction, you may be considered as established in a State other than that of the seat of your economic activity when:

• you have a fixed establishment in that other State with a sufficient degree of permanence and a structure capable, in terms of human and technical resources, of carrying out transactions; and
• this establishment participates in the execution of the transaction in question.

Consequence of the place of establishment:

In principle, and subject to certain specific cases, your place of establishment has no impact on whether a sale of goods is subject to VAT in France. For example, you are liable for VAT in France if you sell goods located in France to customers in France, regardless of whether you are established in France, in another EU Member State, or outside the EU.

As an exception since July ¹, 2021, your place of establishment is taken into account when you make sales via Rakuten:

• For domestic sales and intra-community distance sales made via Rakuten, you are liable for VAT if you are established in France or in the EU;
• If you are established outside the EU, it is Rakuten that is liable for the VAT due on sales made on the platform.

Your place of establishment may affect your reporting obligations or the exercise of your right to deduct the VAT paid (reporting obligations, procedures, and deduction methods may vary depending on whether your place of establishment is in France, in another EU Member State, or outside the EU).

Impact of being assigned an intra-community VAT number:

In principle, having an intra-community VAT number in a European Union Member State has no impact on the location of the seat of economic activity or the fixed establishment.

By way of exception, the French tax authorities would consider you to be established in France for sales made in France if:

• You have a fixed establishment in France with an intra-community VAT number and
• If you include this number on invoices sent to your customers in France.

This presumption can be rebutted if it is demonstrated that this fixed establishment did not participate in the transaction: if the sale was carried out from your seat of economic activity outside of France or from a fixed establishment located outside of France, then you would be considered as not being established in France for that sale.

You are a seller established in an Overseas Collectivity: what is your place of establishment with regard to the new VAT rules that entered into force on July ¹, 2021?

If you are established in an Overseas Collectivity (Guadeloupe, Martinique, Reunion, French Guiana, and Mayotte), you are considered as a taxable person established outside the EU for the application of the new VAT rules that entered into force as of July 1, 2021.

Since July ¹, 2021, as a taxable seller, you are liable for the VAT applicable to sales of goods on Rakuten to private customers in the following situations:

• If you are established in France or in the European Union, you are liable for VAT on domestic sales and intra-community distance sales (where the place of departure and the place of destination of the goods are located in the same EU Member State / in two different EU Member States);
• Regardless of your place of establishment, when the goods sold have a value exceeding 150 euros and are imported into another EU Member State and delivered directly to a customer in France, you are liable for import VAT in France;
• Depending on the rules applicable in other Member States, regardless of your place of establishment, when the goods sold have a value exceeding 150 euros and are imported into France or the European Union from a non-EU country and then delivered to a private customer in an EU Member State other than France, you may be liable for VAT in the other Member States concerned;
• Regardless of your place of establishment, depending on the rules applicable in other Member States and specific customs regimes, you may be liable for import VAT when you import goods located outside the EU into a warehouse located within the EU before offering these goods for sale via Rakuten.

In order to be able to determine whether any of these situations apply, Rakuten must collect a certain amount of information from sellers [refer to the question/answer regarding the information to be provided to Rakuten or refer to the question/answer “You are a professional seller established outside the European Union and you sell via Rakuten goods with a value of less than 150 euros located outside the European Union to private customers in France”].

As part of the VAT collection regulations, Rakuten exercises due diligence to ensure, in certain cases, the veracity of the information provided regarding your fixed establishment within the European Union (EU). To ensure compliance with tax obligations and prevent any fraud, Rakuten may perform enhanced checks on the elements and information you have declared. These in-depth verifications aim to confirm the actual existence and accuracy of the information related to the declared fixed establishment.

During these checks, several elements may be examined, such as, for example:

• Any official document attesting to the legal existence of the fixed establishment;
• Any proof of commercial transactions carried out from this location;
• Proof of VAT payments in the country concerned.

In the event of an audit, you must therefore provide updated and valid supporting documents. In case of difficulties or uncertainties regarding the procedure for updating information, it is strongly recommended to consult a tax advisor or to contact your e-commerce consultant.

In the event of insufficient, erroneous, or fraudulent evidence, or if verifications reveal a manifest inaccuracy or non-existence of the fixed establishment within the EU, measures may be taken by Rakuten. These measures may reveal “failures to meet social, tax, and customs obligations,” which may lead to a restriction or suspension of access to services, or a termination of the contract at the member’s fault, as defined in Article 11.2 of the General Terms of Use and Article Pro. 9.1 of the Specific Terms – Professional Sellers.

The seller remains free to challenge this decision, in accordance with the complaint mechanisms provided for by the various regulations in this area and accessible from this page.

Rakuten also reserves the right to report any manifest fraud directly to the French tax authorities and, where applicable, to those of the Member State in which the seller indicates having a fixed establishment for tax purposes.

It is therefore imperative that you provide accurate and complete information regarding your fixed establishment in the EU and that you be prepared to present all required supporting documents. This process is essential not only to comply with tax regulations but also to maintain a relationship of trust with Rakuten. In case of doubt or if you need assistance in preparing the supporting documents, it is advisable to consult a tax advisor or to contact your e-commerce consultant directly.

It should be noted that, despite the checks performed by Rakuten, you remain solely responsible for the accuracy of the information you provide regarding the country in which you have your fixed establishment.

This responsibility also includes the constant updating and correction of any legal information linked to your account as soon as you detect an anomaly. In the event that, following a check, the declared fixed establishment proves to be manifestly incorrect, inaccurate, or non-compliant with legal requirements, it is the seller’s responsibility to take the necessary measures to rectify this information as soon as possible in order to restore the correct VAT collection regime by our services. This step is crucial not only to comply with tax and regulatory obligations, but also to avoid the risk of suspension or sanctions related to the account and/or the electronic wallet on the platform.

The rectification of information must be carried out with diligence and precision, ensuring that all data accurately reflects the actual situation of the fixed establishment within the EU.

More information on fixed establishments is available on the tax authorities’ website.