French draft finance bill for 2024 released

On 27 September 2023, the French draft Finance Bill for 2024 was published.

With respect to the prevention of VAT fraud, the bill provides:

• that the VAT reverse charge should be extended to the transfer of guarantees of origin certificates provided for in the Energy Code;
• for the creation of a tax compliance procedure, with a mechanism for ordering the dereferencing of, or restricting access to, online platforms providing access to websites of businesses carrying out economic activities from a jurisdiction outside of the European Union and without paying the VAT due;
• an adjustment of VAT on importation rules by making “dropshippers” liable for the VAT on distance sales of imported goods under certain circumstances;
• a two-year extension of the authorisation for the French tax authorities to collect data from social medias in order to detect tax fraud;

With regards to the small enterprises business scheme (i.e. the specific scheme whereby businesses the annual turnover of which does not exceed a certain threshold are not subject to VAT obligations), the main change is the possibility for companies established in other EU Member States to benefit from the scheme provided in France if they do not exceed a European turnover threshold of EUR100,000. French businesses should also be able to benefit from the scheme in other Member States in so far as they meet the relevant conditions.

key takeaway

The main VAT measures announced at this stage of the legislative process relate to the prevention of VAT fraud in the digital economy and the extension of the scope of the small business scheme for businesses trading in several EU Member States. This is in line with global trends.

Reference: Draft Finance Bill 2024