France proposes new VAT rules on goods valued over 150 euros

In July 2021, the EU implemented new trade rules for U.S sellers, making all goods imported to the EU valued at up to 150 euros (approximately $178) subject to VAT, and items valued at more than 150 euros subject to VAT and duties. See our post on the topic.

Now, La Poste (the designated operator of France’s postal system) has announced additional measures coming in effect on January 1st, 2022:
In addition to the rules applicable to IOSS (business-to-consumer (B2C) flows below 150 EUR), online marketplaces are also liable for VAT in the following cases:

• B2C flows below 150 EUR with a sale brokered by an online marketplace not registered with the IOSS system.
• B2C flows below 150 EUR not eligible for the IOSS system: articles subject to restrictions and prohibitions, excisable items.
• B2C flows above 150 EUR.

Click here to see La Poste’s full statement.

What this means for sellers shipping goods to France is that they will now be obliged to collect VAT on goods valued above 150 euros. In order to comply, merchants will need to obtain a French VAT identity number from the French tax authorities, which will allow them to pay back the VAT collected during commercial transactions.

This announcement raises a lot of questions. Traditionally, the EU aligns the rules for the postal Union and rolls out changes across all member countries. Individual countries’ postal systems generally don’t implement changes without guidance from the Union. Furthermore, the January 1, 2021, deadline, and current lack of clear directions for online sellers, makes us question whether France will be able to implement the change this quickly. GlobalPost will continue to monitor the situation and provide updates in the coming weeks.