The tax treatment applicable to “distance selling” is relatively simple and light. Mail order companies in one EU country can easily transmit their businesses to other EU countries, within a few limitations. The following points on direct selling relate to sales made by companies located in one EC country to private persons located in another EU country.
If a non-French European company sells goods to French private clients, the rules are as follows:
> When the annual sales amount does not exceed €100 000 (before VAT), the applicable VAT rate is the rate applied in the company’s home country. There is no need for the company to identify itself to the French tax authorities and there is no other particular administrative undertakings.
> If the annual sales exceeds €100 000 (before VAT), the French VAT rate must appear on the sales invoices, the company must identify itself to the French tax authorities and the company must file French VAT returns.
> Non-French European companies may also opt for liability to French VAT starting from the first € of their sales to private persons in France. In that case, they must be identified by French tax authorities. This option is worthwhile when the VAT rate applicable in the country of origin is higher than the French VAT rate (general rate in France: 19.6%), such as, for example, Germany.
> Non-EU companies undertaking direct selling into France to private persons have a slightly more complex route. They would come under the general category of import trading: French VAT would normally be applied when clearing through French Customs.
