Whatnot - 2024 Tax guide - France

This guide has been prepared by an independent third-party law firm.  Every buyer’s and seller's situation is unique and so are their specific tax circumstances. The below stated information should not be considered as tax advice, but as a general overview of relevant tax rules. Whatnot does not provide tax advice for individual situations, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.

August 2024

FRANCE - TAX CONSIDERATIONS FOR FRENCH TAX RESIDENT WHATNOT SELLERS

Hey there! If you’re a seller based in France and want to sell stuff through Whatnot, let’s talk taxes. 

Taxes can be tricky and therefore you should keep up to date with your tax obligations and remain tax compliant. The timely preparation, filing and payment of taxes are your responsibility per the Whatnot terms of Service.

As a French seller, make sure you are on top of the taxes that may apply to you, such as:

• Value added tax (VAT).
• Income taxes;
• Social security contributions;

Just a heads-up: this guide covers VAT, Income taxes and social security contributions for French sellers. If you’re selling from outside France to French consumers, it’s a different ball game. Keep that in mind! – see here for our country guides for German and UK sellers.

The info in this guide isn’t all-inclusive and definitely not legal or tax advice. If you’re not sure on your local tax rules, it’s a good idea to double-check with your tax authorities or chat with a professional to get advice that is tailored to you. Whatnot cannot help you out with questions about this guide, it’s intended as a jumping off point.

Just so you know, we don’t refresh this info on the fly. It's best to verify if there’s been any recent changes to the laws and procedures.

Whatnot may need to report your income made through the platform to your tax authorities under the EU’s DAC7 rules. So, if there’s a difference between what Whatnot reports and what you report, the authorities may ask you questions about your income. See the following webpage.

VALUE ADDED TAX

VAT can get pretty tricky, so make sure you understand the rules as they relate to your specific situation.

When selling and shipping goods, the VAT rules vary depending on the destination where the goods are going:

• French buyers: French VAT rules will apply.
• EU buyers (outside of France): Generally, VAT rules in the buyer’s country apply if you sell for more than EUR 10,000 in other EU countries per year to consumers. If you sell goods to businesses, VAT exemptions on your supplies may apply.
• Non-EU buyers: For sales to consumers and businesses you can typically get VAT exemptions in France. In addition, VAT rules in the customer’s country may apply to you.

Below you’ll find more information on these categories.

SELLING TO FRENCH BUYERS

If you’re regularly providing goods or services in France (not just a one-time thing), you may need to register for and charge VAT to your buyers and pay this VAT to the French tax authorities.

Therefore, if you are selling items on the Whatnot platform, you may need to include French VAT in the item price and pay this VAT amount to the French tax authorities. You as the seller should figure out if you should charge French VAT on your sales.

Do I need to charge any VAT to French buyers if I am selling items on Whatnot?

If you regularly sell goods through Whatnot with the goal of making revenues, you’ll need to register for VAT and charge VAT to your buyers.

Therefore, if you are selling items on the Whatnot platform, you may be required to apply French VAT to the item price and pay this VAT amount to the French tax authorities. You as the seller should determine whether you should charge French VAT on the sale of your goods. 

If you are a small business however you can also choose to not charge any VAT. You are a small business if your sales:

• did not exceed €91,900 in the previous calendar year.
• did not exceed €91,900 in the year before the previous calendar year and your turnover of the previous calendar year did not exceed €101,000.
• does not exceed €101,000 during your first year of activity.

Make sure to include sales made outside of the Whatnot platform as well when calculating these thresholds! There are various applicable thresholds which may change each year. You can find more information on this subject here.

If you are a small business, you should not:

• charge VAT to your buyers
• issue VAT invoices to your non-business buyers
• file monthly VAT returns (you do need to file an annual VAT return) and
• deduct any VAT charged to you.

Even though you might not have to pay French VAT because you are a small business, there's a rule called the "reverse charge mechanism" that could mean you still owe taxes on certain things you purchase from abroad. For example, this applies to the fees charged by Whatnot. In short, instead of Whatnot paying the VAT, you'd be responsible for paying and declaring it yourself through a VAT return.

Should I account for VAT on the fees charged by Whatnot to me?

If you are registered for French VAT you should be sure to add your French VAT number to your Whatnot account via the flow described here. In such case, Whatnot will not charge VAT on the fees charged to you. Instead, you will have to account for VAT on these fees through the so called ‘’reverse charge’’ mechanism in your French VAT return.

This "reverse charge" effectively means that you have to report French VAT on Whatnot's fees charged to you in your French VAT return yourself. Do not worry, normally this does not result in any tax payable by you because the VAT you add on your sales (output VAT) cancels out the VAT you pay on Whatnot's fees (input VAT) in the same return. This works as long as you're not selling stuff that's exempt from VAT (which you probably aren't). If you are selling stuff without VAT, the VAT you report on Whatnot’s fees might not be fully recoverable. You should contact your local tax advisor to see whether you can fully deduct VAT under the reverse charge. If you can fully deduct VAT due under the reverse charge, you should do it as described below.

If you file monthly/quarterly VAT returns, the "reverse charge" has to be reported as follows:

• Report the total amount of the fees charged by Whatnot to you in boxes A3 and 8 (‘’Base hors taxe’’);
• Report French VAT due on Whatnot’s fees in Box 8 (‘’Taxe due’’);
• Report the French VAT amount as deductible in box 20.

If you file annual VAT returns, the "reverse charge" has to be reported as follows:

• Report the total amount of fees charged by Whatnot to you in box AC;
• Report French VAT due on Whatnot’s fees in Box AC;
• Report the French VAT amount as deductible in box 20.

VAT applies to me. How do I calculate how much VAT I need to collect from French buyers?

VAT rates in France aren't set in stone, they can change sometimes. If you have to charge VAT to your buyers, it's a good idea to check with the French tax authorities every now and then to make sure you're charging the right amount.

In France, the standard rate for goods is 20%, but some things like (comic)books and food items have a lower rate of 5,5%. Which rules and rate applies to a product really depends on what type of product it is.

If you supply goods free of charge to users on the Whatnot platform (for instance as a giveaway), you may need to account for VAT on the price you paid for the purchase of that product.

VAT applies to me. How do I collect VAT from French buyers?

If you are registered for French VAT, you'll need to collect the VAT from French buyers. Then, you have to report and pay that VAT to the government through your VAT return, usually every month.

If you have to charge VAT, the price you show needs to include VAT already. Think of it like the final price with everything added in. Now, sometimes there's paperwork involved, like receipts or invoices with all the VAT details spelled out. You usually only need to issue a formal VAT invoice if a business is buying from you, not individuals. For individuals, the packing slip and receipt provided by Whatnot is usually fine.

If you do issue an invoice there are some specific things you have to include on an invoice by law. Like your and your customer's full info, VAT ID numbers, and the date. Also, don't forget to mention the VAT rates and amounts. If this sounds complicated, don't worry. Just ask a local expert to make sure you're on the right track. You can find more information here.

The amount of VAT you have to pay to the French tax authorities is basically how much VAT you collected from your sales and how much costs you paid for your business. You only pay the difference (VAT collected - VAT paid).  An example of where you pay VAT might be on shipping supplies to purchase for your business. Keep in mind, not all expenses are deductible. We recommend that you contact a tax advisor for more information.

You have to register for VAT with the French tax office (SIE) within 15 days of starting your business. You have to file VAT returns (the so-called "CA3" form), online on the website of the SIE (impots.gouv.fr). You have to pay that VAT at the same time you file.

Normally, you have to file these VAT returns every month, but if your VAT amount is less than €4,000 a year, you can do it every three months (quarterly). There are even easier ways to file (simplified schemes) if you qualify, and those might only need to be done once a year.

The exact deadline to file will be fixed by French tax authorities at the time of registration, but it's usually between the 15th and 24th of the month after the period you're reporting on. For example, if you're filing monthly, your January stuff would be due between February 15th and 24th.

Further guidance on filing returns can be found on the website of the French tax authorities - here.

Margin scheme for second hand goods

The margin scheme is a special way to pay VAT in France for resellers. You basically only pay VAT on the profit you make when you sell something, not the whole price. You fall under this scheme if you're a reseller buying and selling certain used stuff, like from regular people or small businesses that don't charge VAT. Basically, you're buying stuff without VAT and then selling it with VAT added on your profit and not on the sales price. You pay VAT on the difference between what you bought the item for and what you sell it for. The Margin scheme applies automatically, but you can opt for normal VAT taxation for every separate transaction.

Important note: This scheme doesn't work if you buy something with VAT already charged to you.

This scheme can also work for sales of artwork. However, with the margin scheme, you generally can't claim back any VAT you paid on stuff you bought (and neither can your customer). Not sure if it applies to you? Best to check with a local expert to see if the margin scheme makes sense for your business.

SELLING TO CUSTOMERS OUTSIDE OF FRANCE

Which VAT rules apply if I sell to customers in the European Union where my sales to these customers do not exceed EUR 10,000 on an annual basis?

If you're selling things to consumers in other EU countries (excluding France), and your total sales to them are under €10,000 per year (before VAT), then you can treat those sales the same way you treat sales to French customers.

For instance, if your total sales to all customers in the EU are as follows:

Sales to customers in the Netherlands: €3,000 per year;

Sales to customers in Belgium: €2,000 per year;

then you do not exceed the €10,000 threshold and the French VAT rules apply to your sales.

Important! This €10,000 limit counts all your sales across different platforms, like Whatnot and others.

For these sales under the limit, you have to charge French VAT and send that money to the French tax authorities with your regular VAT return.

Which VAT rules apply if I sell to customers in the European Union where my sales to these customers do exceed EUR 10,000 on an annual basis?

If you're selling more than €10,000 worth of stuff to consumers in other EU countries (excluding France) in total each year, things get a bit more complex for VAT. For these sales you have to charge VAT based on the VAT rules of the customer's country, not France's. So, the VAT rate might be different depending on where they live. This also means you're responsible for paying VAT in those other countries, even if you're a small business in France.

For instance, if your total sales to customers in the EU are as follows:

Sales to customers in the Netherlands: €8,000 per year;

Sales to customers in Belgium: €5,000 per year;

then you do exceed the €10,000 threshold and the VAT rules of your customer’s country apply to your sales.

For those sales over €10,000 to consumers in other EU countries, you don't report the VAT in your French return. Instead, there's this system called the One Stop Shop. It lets you report all that VAT in one big EU report, making things simpler. If you registered for the One Stop Shop, invoices are optional for you, but if you do send them, you have to make sure they follow the proper legal format.

For more information on the One Stop Shop VAT return, please click here.

The One Stop Shop is not mandatory. If you are not using it, you have to register for VAT in the EU countries where you are selling to though. In such case you also have to send VAT invoices to all your customers!

Sales to businesses from France to the EU are even easier to handle (both up to and above 10,000 EUR). You typically get VAT-exemptions in France, and the business buyers should self-report VAT in their own country. Do not forget to collect the formal evidence that you need for the VAT-exemptions in France (e.g. shipping documents and invoices).

Which VAT rules apply if I sell to customers outside the European Union?

Good news. When you sell things to people outside the EU, it's considered an export and you don't have to charge French VAT on it. Heads up, though: You still have to report this sale on your French VAT return, just to show it as an export. You also have to keep track of documents to demonstrate that your goods were exported from France.

And one more thing: Even though you don't pay VAT in France, there might still be VAT rules you have to follow in the customer's country

INCOME TAX AND SOCIAL SECURITY

Apart from VAT, selling goods can be subject to different tax regimes depending on whether you sell goods:

• not as a business: your sales may be subject to the tax regime on sale of movable assets or the flat tax regime on sale of precious metals and objects. For assets other than precious metals, this is only the case if your sale exceeds €5,000.
• as a business: your sales may be subject to the tax regime in case of business activity

Tax Regime on Sale of Movable Assets

If you sell your stuff, this is in principle taxable under the capital gain regime for movable assets ("plus-values sur biens meubles"), as long as you are not selling as a business.

What are the taxable sales and what are the exempt sales?

The capital gain regime is for French residents selling goods. There is no minimum number of sales before this regime applies to you. Only one sale and you are on the hook. The regime applies to selling every object that that can be moved from one place to another without modifying or destroying it.

Certain things are exempt, in particular:

• Furniture, household appliance and cars;
• Everything with a sale price of lower or equal to €5,000;
• Everything that you have owned for more than 22 years (see below).

Normally, if you sell precious metals, jewelry, works of art, collection objects or antiques another tax regime applies. You can choose for this capital gain tax regime instead.

What is the taxable basis and tax rate for these sales?

The tax basis is the difference between (i) your sale price and (ii) your purchase price.

The sale price is the price you put on your receipt or invoice for your customer. Your purchase price is the actual price you paid for the thing you are selling. If you got that for free, you have to use the market value at the date you received it. If you make extra costs for acquiring or selling something you can take this along making your taxable base lower.

The taxable base can also be progressively reduced if you have been the owner of the good for a long time, and after 22 years you do not have to pay any tax for the sale at all.

The tax rates are:

What are my reporting and payment obligations?

For each sale, you have to file a return (Form No 2048-M-SD) and pay your taxes. You have to do this within one month from the sale. If you have owned the thing you are selling for 22 years or longer or if you realizing a capital loss, you do not have to file this.

You must also reported your personal and annual income in a tax return in May-June of the next year (Y+1).

Flat-Rate Tax on Precious Metals and Objects

For sales of precious metals and other similar products your sale is taxed with a special flat tax. Again, this is only if you do not do this as a business.

Which gains are in the scope of the precious metals and objects regime?

This flat tax is for French residents selling their precious metals and similar products. There is no minimum number of sales before this regime applies to you. Only one sale and you are on the hook.

What are the precious metals and objects in scope of the regime?

The following metals are seen as precious metals:

• Gold;
• Platinum;
• Silver;
• Waste and scrap of precious metals, gold-plated, etc.;
• Gold and silver coins created after 1800 (older coins are seen as collection objects).

According to French tax authorities' official guidelines, the following items are seen as precious objects::

• Art, antiques, paintings, engravings, tapestries, sculptures, photographs, audiovisual works, furniture older than 100 years, books, etc.;
• Jewelry and assimilated pearls, diamonds, stones, jewelry items, silverware items, costume jewelry, watches, etc.;
• Collection items: postage stamps, historical, archaeological or zoological objects, gold and silver coins created before 1800, vehicles, etc.;

The flat tax is only for precious objects if the sale price is higher than €5,000. Precious metals are always subject to this tax, even below €5,000. 

Which sales are exempt?

Certain precious metals and objects are exempt :

• Precious objects below €5,000;
• Sales for public museums, libraries and archive services;
• Sometimes, sales by non-French residents.

Some sales can however be subject to another tax regime as well:

• Where you buy and sell art on a regular basis, the "industrial and commercial profits" regime is for you;
• Where you are the artist selling your own art the "non-commercial profits" regime is for you.

You can choose for the capital gains on movable assets regime instead of the flat tax. It can be interesting to choose the capital gains tax if you did not make a big profit or if you have owned the thing you are selling for a long time already. You can choose to pay the capital gains tax instead by filing Form No 2092-SD.

What is the taxable basis and tax rate for the sale of precious objects?

The tax is due on the sale price (not the capital gain) and the flat tax replaces the capital gain tax.

The tax rates are:

For precious metals, the 11.5% is made out of 11% income tax and 0.5% social security ("CRDS"). For precious objects, the 6.5% is made out of 6% income tax and 0.5% social security.

What are the reporting and payment obligations?

If you take the flat tax you have to file a specific tax return (Form No 2091-SD) and pay the flat taxes within one month from the sale. If you take the capital gain tax, please see above.

Tax Regime for Business Activity

If you are buying or manufacturing assets in order to (re)sell them, you should be considered as acting as a business for French tax. As a result, the commercial regime applies ("Bénéfices Industriels et Commerciaux" or "BIC"). You are acting as a business if you personally make sales on a regular basis.

This tax is not for artists selling their own artwork who are subject to the non-commercial regime ("Bénéfices non commerciaux" or "BNC"). This guide will not elaborate on that regime. If you would like to know more we recommend to contact a tax advisor.

The first step of this regime is to notify the tax authorities that you have business activity and proceed to all the formalities via their the online portal ("Guichet unique") by clicking on this link.

The income tax and social security regimes depend on the level of your turnover and on some other aspects of your activity.

What are the different thresholds impacting the tax and social security regimes?

Below is an overview of the different thresholds to see which regime applies to you and after that an explanation for every regime:

Auto-entrepreneur regime

What is the Auto-entrepreneur tax regime?

You can choose for the "auto-entrepreneur" regime. Three conditions must be met for this:

1. You are subject to the micro-tax regime, requiring that your turnover is below €188,700 for the previous year (Y-1) or the year before (Y-2) and you did not opt for the actual expenses regime; and
2. The net taxable income of your household for the year before the previous year (Y-2) did not exceed €28,797; and
3. You are subject to the micro-social regime (you benefit from the micro-business tax regime).

For the first year of your business, the threshold of €188,700 is adjusted to the time you have been active that year.

In order to benefit from this regime, you have to notify the social security authorities (URSSAF) before September 30 of the year before you want this regime to apply, or within 3 months if you are still setting up your business.

Under this regime you have to pay a flat income tax:

You do not have to pay any additional income tax on this income.

You have to file a specific tax return and pay the flat income tax every month or quarter to the social security authorities (URSSAF). You also have to report your annual turnover in May – June of the next year (Y+1) in your annual income tax return, precisely by using the Form No. 2042 C PRO.

What is the Auto-entrepreneur social security regime?

This social security regime applies automatically if you are subject to micro-business tax regime (see above). If you choose for the actual expenses tax regime (see below) or when you do not meet the criteria anymore, this stops.

Under this regime you have to withhold social security contributions:

You do not have to pay any additional social security contributions on this income. You only have to declare your turnover and pay the social security contributions every month to the social security authorities (URSSAF). You can also opt to do this quarterly.

You can also choose for the ordinary rules for social security. You have to let the authorities know via the online account at www.auto-entrepreneur.urssaf.fr and before some specific dates.

Micro-business regime ("Micro-BIC")

What is the Micro-business tax regime?

You can choose the Micro-business tax regime if your turnover excluding VAT for the previous year (Y-1) or the year before that (Y-2) did not exceed €188,700. This is only when you do not choose for the auto-entrepreneur regime and the actual expenses regime.

If you choose this regime , you can apply a flat-rate allowance to cover all costs and expenses incurred. Taxable profit is determined by taking off 71% of the turnover (this cannot be less than €305).

The taxable profit is then taxed at the following rates:

This tax regime applies automatically. However, you can choose for the auto-entrepreneur tax regime if the above-mentioned conditions are met or for the actual expenses regime.

You have to report your annual turnover in May-June of the next year in your annual income tax return, using Form No. 2042 C PRO. You do not have to file a specific tax return or prepare financial statements. You only need to keep a journal book listing your revenues, supported by invoices and other supporting documents.

The tax authorities will take this tax from your bank account every month or every quarter. If you have to pay more at the end of the year, this will happen after the filing of the annual income tax return between September and December of the next year (Y+1). If your advance payments were higher than the final income tax due, you get a refund.

What is the Micro-business social security regime?

The social security regime for the Micro-business activities is the same as for Auto-entrepreneurs activities.

Actual expenses regime ("régime réel")

What is the actual expenses tax regime?

Self-employed workers whose annual turnover excluding VAT for the previous year (Y-1) and the penultimate year (Y-2) exceed €188,700 are subject to the actual expenses tax regime.

If your turnover excluding VAT for the previous year (Y-1) or the year before that (Y-2) did not exceed €188,700, you can also voluntary choose the actual expenses tax regime.

For this regime, you have to determine your taxable profit by deducting real expenses from your revenues. This is normally done by accrual-basis accounting but you can choose for cash basis accounting.

The following rates apply on the taxable profit:

You have to file a specific Form No 2031 before the second working day following May 1^st of the next year (Y+1). You have 15 more days if you file online. You also have to report your profit in May-June of the next year (Y+1) in your annual income tax return, precisely in the Form No. 2042 C PRO. You have to prepare financial statements for preparation of the Form No 2031. You have to keep regular, true and fair accounts, supported by documents. We recommend to request professional assistance for this.

The tax authorities will take this tax from your bank account every month or every quarter. If you have to pay more at the end of the year, this will happen after the filing of the annual income tax return between September and December of the next year (Y+1). If your advance payments were higher than the final income tax due, you get a refund.

What is the actual expenses social security regime?

If you do not meet the criteria for the micro-business regime you have to pay social security under the ordinary social security regime. If you meet the criteria for the micro-business regime, you can also opt for the ordinary regime.

You have to calculate social security contributions over you taxable income of the year before the previous year (Y-2) and the taxable income of the previous years (Y-1). You pay the social security balance during the next year (Y+1) when you have declared the taxable income of the year Y.

For the first year, the social security contributions are calculated based on fixed amounts and then they are updated as soon as the first income tax return has been filed. In the event the taxable income is nil or a loss, minimum social security contributions would be due.

Please see here to obtain details on those social security rates and basis.

The information to calculate social security contributions is what you have reported in the annual income tax return in May – June of the next year (Y+1). You pay the contributions every month, but you can also choose to do this every quarter. You have in principle to pay before the 5^th of each month electronically.