E-Commerce, Newsroom, VAT | 21. February 2023

France: Online Sales Surge to €146.9 Billion in 2022

This article looks at recent developments, including rising online sales in France, financial results from Shopify and eBay, and fraud and e-invoicing changes. Furthermore, find out how eBay boosts customer confidence with a new authenticity check for children's shoes. Get helpful VAT return tips from HMRC. by

French e-commerce sales of products and services reached 146.9 billion euros in 2022, a 13.8% increase from the previous year, according to Fevad, the French e-commerce and distance selling federation. This growth was mainly driven by the transport, tourism, and leisure sectors, which saw a 36% increase in sales compared to the previous year. Online sales of consumer goods also increased by 1% due to inflation. However, sales of products declined by 7%, while online sales of services grew by 50% compared to 2019. In Q3 2022, internet sales reached €35.9 billion, with 560 million transactions, an increase of 8.8% from the previous year, driven by the recovery in services. Travel and leisure still showed strong growth, while fashion, home decoration, and beauty sales stabilized at the end of 2022. Sales of electronic products declined by 15% compared to the previous year. The average basket size also increased by 7.3% due to inflation.

Shopify announces financial results for 2022

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The e-commerce infrastructure provider Shopify has announced its financial results for the fourth quarter and full year of 2022. Gross merchandise volume increased 13% to $61 billion, and total revenue increased 26% year-over-year to $1.7 billion. Shopify introduced several new products in 2022 to help merchants simplify their commerce operations, including Shopify Fulfilment Network and Deliverr. The company expects high double-digit percentage year-over-year revenue growth and a slight increase in gross margin in 2023.

eBay states the number of European customers. Amazon is still pending.

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17 February was the deadline for major platforms to publish the number of their users in the EU. While Amazon has not yet published any information, eBay has announced the number of their European customers, reports online magazine Wortfilter. Platforms are required to post “information on the average monthly active recipients of the service” in the EU under Article 24(2) of the DSA to determine whether it is a very large online platform, reaching at least 45 million users per month in the EU. Still, eBay has said that the average number of monthly active recipients of its marketplace in the EU was well below the 45 million user threshold. Amazon has said it would publish the figures, but estimates it has well over 45 million active users in the European Union. Whether this interpretation of the platforms will hold up, possibly, remains to be seen, as the requirements are stricter, and the figures have to be updated every six months.

eBay.de now authenticates children’s shoes

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From now on, parents and their children can have them check the authenticity of new and used children’s sneakers on eBay, reports Onlinemarktplatz.de. This service, which applies to sneakers with a retail price of 100 euros or more, is intended to protect buyers and sellers from fraud and fakes. The authenticity check is initially available for the categories “shoes for girls,” “shoes for boys”, and “unisex shoes”. It will also be available for “baby shoes” from Q2, 2023. The service is available for sneakers from an extensive catalogue of brands and applies to fixed-price and auction listings posted on eBay.de with item and delivery locations in Germany. Sneaker Con’s experts check the shoes for dozens of specified inspection points and compare them to the listing description. If authenticity is confirmed, an NFC tag is attached to the left shoe, which contains detailed information about the shoes and facilitates resale. In the case of returns, the buyer sends the item back to the authenticity checkers, who check the item and its condition before sending it back to the seller. The service is initially free, and all information can be found at ebay.com/authenticitycheck-sneakers.

€40 million VAT fraud uncovered by EPPO in a sting against organised crime

The European Public Prosecutor’s Office (EPPO) has announced the seizure of €40 million in assets and the arrest of six individuals as part of an investigation into a VAT fraud scheme involving several European countries. The criminal organisation is believed to have taken advantage of EU rules on cross-border transactions to evade VAT payment on selling electronics and computer equipment. The scheme involved a labyrinthine network of companies in Bulgaria, the Netherlands, Poland, Slovakia, and Italy. Ultimately, the commodities were sold to regular Italian companies at very competitive prices and to other companies in the EU, allowing for massive tax savings. The scheme generated huge VAT credits in Italy, leading to immense criminal profits that were then laundered. According to Europol, VAT carousel fraud is a significant problem in the EU and costs around €50 billion in tax losses annually.

Dutch court: No VAT deduction and application of zero rate due to lack of proof and payment default

X BV, a Dutch company, delivered shoes to a company in Germany and requested a refund of the input tax. The inspector refused the deduction of input tax and the application of the zero rates because it was not clear that the shoes were transported abroad, and also imposed a negligence fine on X BV. X BV appealed, but The District Court of The Hague ruled that the inspector was right to refuse the deduction and impose the fine, reports Wolters Kluwer. X BV failed to prove that the shoes were transported abroad, and the inspector made it plausible that X BV would not pay the purchase invoices. However, the court ruled that the negligence fine was wrongly imposed because the lack of proof of transportation does not necessarily indicate intent or gross negligence.

Poland proposed changes to the mandatory e-invoicing framework

The Polish Ministry of Finance recently held a conference to discuss upcoming changes to the draft bill introducing mandatory e-invoicing in Poland, according to Sovos. The legislative process is still ongoing and expected to last until June/July 2023. However, the Ministry of Finance presented changes planned to be included in the final legislative framework. One of the significant changes is that the legislative Act, initially designed to enter into force on 1 January 2024, has been postponed to 1 July 2024, with penalties postponed to 1 January 2025. Other changes include exempting VAT-exempted taxpayers from implementing mandatory e-invoicing until 1 January 2025, excluding invoices from B2C transactions and tickets that serve as invoices and enabling corrective structured invoices to be issued in case of technical failure or offline. These changes must be included in the draft law and enacted to become binding.

HMRC Guidance: How to fill in and submit VAT returns

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The UK government has issued a notice to VAT-registered businesses to help them complete their VAT returns and submit them to HMRC. The information guides how to fill out the return, box by box, and advises businesses to read any relevant VAT notices before submitting their returns. Most companies must submit their returns via functional-compatible software and pay electronically. Software providers can offer guidance on how to do this. Suppose a business is exempt from digital record-keeping. In that case, it can file its return online; if it cannot, HMRC will offer an alternative.

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