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February 28, 2023

France implements regulations under DAC7 with respect to digital platforms

France has implemented the European Union (EU) Directive DAC7 (Council Directive 2021/514 of 22 March 2021) under Articles 1649b A to 1649b E of the French Tax Code (FTC). The DAC7 regulation is implementing an obligation to provide the tax authorities with the reporting of revenue generated by users of digital platforms.

Such regulations are intended to reduce the administrative burden on foreign platform operators and tax authorities of EU Member States.

Before the implementation of Directive DAC7, platform operators were subject to the French regulations of Article 242a-1°, 2° and 3° of the FTC.

Since 1 January 2023, Article 242a of the FTC has been amended and sets forth the following: The company, regardless of its place of establishment, which, as a platform operator, puts people in contact electronically with a view to the sale of a good, the provision of a service or the exchange or sharing of a good or a service, provides, on the occasion of each transaction, information on the tax and social security obligations incumbent on the people who carry out commercial transactions through its intermediary. It provides them with an electronic link to the sites of the administrations that allow them to comply with these obligations, if necessary.

Other prior obligations of the platform operators have been transferred and amended under the Articles provisions implemented under the Articles 1649b A to 1649b E of the FTC.

For EU-established platform operators, even if the obligations foreseen by DAC7 can be fulfilled in the country of establishment of the platform operator, a specific procedure must be followed to inform the French tax authorities that DAC7 obligations are being fulfilled in another EU Member State.

For other platform operations, due diligence should be performed to ensure that DAC7 obligations are fulfilled in France and the EU.

For each obligation (Article 242a-1° and Articles 1649b A to 1649b E of the FTC), a fine of €50,000 can be applied if platforms do not comply with such rules.

Specific attention should be paid to the legal and tax platform regulations in France since platform operators are designated as jointly and severally liable for unpaid taxes and subsequent fines due in principle by users when the latter are not in compliance with French legal and tax regulations. As an example, platforms are viewed as jointly and severally liable for the payment of import Value Added Tax or eco-taxes when users do not comply with French tax rules.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Société d'Avocats, Indirect Tax, Paris