French tax rules set forth several tax compliance obligations for online platforms. In particular, e-commerce platforms that connect users to each other must file, before 31 January 2020, a report of transactions involving users of their platforms and made during 2019.
The reporting rule is contained in Article 242 bis of the French tax law.
The information to be reported by the online platforms must be in the format of an XML file (in particular, one that follows the XML schema set forth by the French tax authorities). The XML file is “technically validated” when filed before 31 January 2020. However, these online platforms, before 28 February 2020, will be able to correct or complete data filed subject to approval by the authorities.
The technical format of the XML file has specific rules. For instance, it must be supported by an XSD file. There is a format already accepted for French accounting entries (that is, the French equivalent of SAF-T), but certain companies may not use this format if they prefer “flat files.” However, the XML format implies obligations in terms of format and data structuring.
The XML file submitted to the authorities must be encrypted using a “public key” provided by the tax authorities.
If the files are not compliant with the XML file rules, the authorities may consider that the file has not been filed and may impose a penalty for non-filing (the amount of the penalty being equal to 5% of the unreported amounts (article 1736 of the French tax law)).
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This new reporting obligation for online platforms requires them to communicate data under a strict format set forth by French tax authorities. Online platforms can anticipate how to address certain challenges regarding this obligation by determining their ability to extract data under XML format by 31 January and by determining that the technical specifications are met.
There is a specific approach and methodology developed by KPMG to convert “native data” into the required XML format.
For more information, contact a tax professional with the KPMG member firm in France:
Laurent Chetcuti | + 33 1 55 68 48 87 | firstname.lastname@example.org
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