E. TAX CONTROL: NEW PRIORITIES AND UPGRADED TOOLS
1. The particular case of platforms not involved in the transaction
Unsurprisingly, platforms which do not know the amount of the transaction are also platforms where the distinction between private individuals and professionals, or between second-hand sales and commercial sales, is the hardest to make.
The most emblematic case is that of the small ads site Leboncoin , which has 25 million unique visitors per month (37% of the French population), and via which 18.5 million French people (i.e. 27% of the population) concluded at least one transaction in 2016. In all, nearly 100 million transactions were concluded in 2016, for a total amount of EUR 21 billion : the economic stakes are therefore significant. Leboncoin is not involved in the transaction between the seller and the buyer, but is paid by advertising and a freemium offer, which allows sellers to buy visibility options.
Another example, is the platform Zilok , which enables private individuals and professionals to rent objects of all kinds (700 categories), and does not take any fee on the transaction, but is paid only for putting the parties in contact with each other , according to terms which depend on the lessors status: a fixed fee when booking rentals offered by private individuals (levied from the lessee in the form of a deposit), a monthly subscription for professional rentals, a premium rate number of the 0899 type allowing the owner to be contacted to ask him questions about the object for rent etc. In all cases, this economic model is based on non -intervention in the transaction . The help section of the website thus states the payment methods of the balance of the rent are set out by the owner of an item of property, and stated very clearly in the description of the item of property. All types of payment are therefore possible, which could be a credit card, payment in cash on the spot, bank transfer or Paypal depending on the case. This payment of the balance does not however take place via the Zilok platform but offline .
Some actors, like the Stootie platform which offers services to private individuals, use a hybrid model : the users agree between each other on the terms of payment, i.e. in practice most often in cash, but may also choose to use the platform, which then becomes the payment intermediary.
The existence of platforms not involved in the transactions must not, however, be seen as weakening the whole reporting system proposed by the Working Group for three reasons.
Firstly, the amounts at stake must not be overestimated . Indeed, those platforms that are not involved in the payment are the exception, rather than the majority , payment services being the very foundation of the economic model of most collaborative platforms (see insert), because it allows to deny a fee on the transaction 80 ( * ) . Once the economic models involve significant transactions, going through the platform itself becomes a necessity, because of the safeguards that it provides.
Moreover, in the French environment, Leboncoin is the only case where significant amounts are at stake moreover, one should not infer from this that the totality of the EUR 21 billion transactions are actually taxable, since the bulk consists of second-hand sales .
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The benefits of payment via the platform Payment via the platform, when it is not simply compulsory in some economic models, is often the condition that allows users to benefit from important services, starting with insurance (of an apartment, a car, a service), but also, depending on the activities, satisfied or refundedguarantee, handling returns, invoice management and administrative procedures, payment in several instalments, compensation for delays, etc. From the buyers point of view, the benefits are often significant . For an object sold on Leboncoin , at the average price of EUR 11, the risk is acceptable the site is not in any case a payment intermediary. For an apartment rented on Airbnb , a personal car rented on Drivy , or a professional website creation service offered on Hopwork , the risks are often high enough to make payment of the fee a preferable option. |
Secondly, most of these platforms, although not payment intermediaries, are aware of the amount of the transaction , since it is simply the price displayed for the service or the good offered for sale or, in the case of eBay for example, the amount of the winning bid of the auction. Although it is true that nothing prevents the buyer and the seller from agreeing subsequently on a different amount, the existence of a contractual commitment to pay the price displayed could, where appropriate, be sufficient for the platform to fill in the automatic declaration.
It will be noted moreover that several platforms, which consider that they are unable to communicate the amount of the transactions pursuant to Article 242 bis of the General Tax Code, may also cooperate in an exemplary manner with other services , when it is about combating money laundering and financing of terrorism, fight against counterfeiting or against drug trafficking, etc.
Thirdly, the risk of users leaving platforms in preference for those not implementing automatic reporting is low. During the hearings, some platforms expressed the fear that their participation in automatic reporting would result in users moving to explicitly non-cooperativesites. The Working Group considers that the risk is in fact low . Firstly, with regard to the transactions for which a payment or service guarantee is essential, it should remain more advantageous to go through a third-party payment platform. Then, the reputation risk could be significant for non-participating platforms, especially if the main platforms implement the automatic declaration or at least the information obligation provided for in Article 242 bis of the General Tax Code. Finally, and most importantly, tax control resources will be concentrated on those platforms that do not implement automatic reporting.
Generally, if the automatic income reporting system proposed by the Working Group does not settle all the identified problems, it does cover the bulk of them and appears at this stage to be the best possible solution.
2. Strengthening tax controls and targeting high stakes activities
Automatic income reporting , particularly advantageous for private individuals only making modest income on online platforms, should release the tax authorities from a task that it is neither possible nor desirable for them to carry out , given the amount of resources needed for very modest results.
Therefore, the resources and priorities of tax control of private individuals as regards the digital economy need to be concentrated on those platforms that do not implement automatic reporting, as well as on individuals who do not give their agreement to the transmission of their personal data.
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Proposal No. 14 Strengthen tax audit capacities and give priority to audits of platforms and users who do not opt for automatic income declaration. |
In this regard, it could be proposed to extend the criteria of Decree No. 2015-1091 of 28 August 2015 , which specifies the list of information 81 ( * ) that can be requested as part of the non-nominative communication right, with the following criteria: " persons not having given their agreement to the automatic transmission of their income ; persons registered on a platform not implementing automatic reporting or not certified in accordance with the requirements of Article 242 bis of the General Tax Code .
Certainly, this would not remove the obstacle of territoriality that hinders the effectiveness of the communication right , in particular the non-nominative communication right (see above). That said, better prioritisation of tax control and better knowledge of the amounts at stake (in particular through the analysis of data from automatic reporting) should allow use of this procedure to be reserved to cases which really make it worthwhile , and which therefore really justify, if necessary, the use of international administrative assistance.
Above all, establishing a non-nominative communication right at the European level could be envisaged : more specifically, the Member States could organise themselves to exchange relevant information on a regular basis, depending on the country of establishment of the platforms it being understood that, although it is easy for an online platform to establish itself in a Member State other than where it has its main market, it is clearly more difficult to establish itself in a third country, given the obligations related to the internal market.
In principle, the texts governing administrative cooperation for tax purposes within the European Union already provide a legal basis for such a procedure 82 ( * ) , which would therefore above be a matter of domestic legislation of Member States 83 ( * ) and establishment of best practices.
This is moreover what Estonia proposes to do using data from its own automatic reporting system for Uber drivers set up in 2016, and which should soon be extended to all of the countrys collaborative platforms (see below). According to the General Directorate of the Treasury 84 ( * ) , the country proposes to make this income reporting platform developed by Estonia available to all non-professional drivers regardless of their country of residence, with Estonia then taking on the responsibility of passing on the information to each member State concerned .
The example of San Francisco, set out below, has also shown that it is possible to make proactive use of the communication right.
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Proposal No. 15 Create a request for information regime at the European Union level, allowing tax authorities to send non-nominative requests to the platforms. |
More generally, the tax authorities must, just like other administrative authorities of the State, make better use of the data available to them and that could be available tomorrow with automatic reporting.
However, the methods for exploiting large amounts of data ( datamining and data analysis ) require hiring specific skills , particularly specialised and in high demand and therefore relatively costly. The current legal framework does not enable these atypical profilesto be offered attractive remuneration, particularly given what they could expect in the private sector and in particular working for online platform operators. The remuneration of contract workers is subject to restrictive rules 85 ( * ) , laid down by the law and instructions, which leave little or no leeway for negotiations by the administrative authorities. Consequently, few statisticians and data analysts choose to join public service, despite feeling a real vocation.
Michel Bouvard and Thierry Carcenac, members of the Working Group, have discussed this subject in their special report on the finance bill for 2017 86 ( * ) , and the committee adopted an amendment to facilitate this type of recruitment. The question, a sensitive and important one for all the economic and finance ministries, has, with the economy of online platforms, a vivid illustration of the problem.
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Proposal No. 16 Allow the tax administration to develop advanced skills in data analysis, in particular by offering remunerations attractive to high level profiles. |
In addition, the Parliament and the administrative authorities should be able to have more complete information about the main economic and tax trends of the collaborative economy , which is not the case today. Indeed, the lack of data has been one of the main problems encountered by the Working Group, as it has for all public authorities in relation to this subject.
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Proposal No. 17 Produce an annual study on the main figures of the online platform economy and their users' income. This study should be transmitted to the Parliament and should be supplied in particular with information collected from automatic income reporting. |
Finally, the explanations that follow show that several countries have taken measures to adapt their social contributions and tax system to the economy of online platforms, regarding both taxation rules and tax collection procedures. However, beyond the large range of options chosen to one side, a consensus seems to have emerged in favour of the establishment of thresholds on the one hand, and a third-party reporting system, if not a third party collecting system, on the other hand.
Therefore, Member States should adopt a common approach on relevant solutions that should be implemented , in the form of non-binding guidelines. It is the very purpose of the communication published on 2 June 2016 by the European Commission 87 ( * ) , A European agenda for the collaborative economy , which in particular proposes to lay down thresholds and set up partnerships between administrative authorities and platforms to carry out income reporting, on the Estonia model (see below).
It must be emphasised that a certain degree of alignment of the taxation of individual users of collaborative platforms (for example on the principle or even the level of the thresholds) is not in this case a question of tax competition : it is unlikely that a user will change country for a different threshold. It is more a question of disseminating best practices and simplifying applicable rules.
The OECD could, similarly, make recommendations on the subject , as it does for the fight against Base Erosion and Profit Shifting (BEPS Project) as well as, to a lesser extent, for VAT.
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Proposal No. 18 Promote a common approach at the European or international level for adapting taxation rules to the online platform economy, for example through the publication of guidelinesby the European Commission or the OECD. |
III
* 80 However, alternative models exist: Zilok, for example, offers an insurance triggered by the payment not of the rent , but of the deposit collected when using the booking service.
* 81 As a reminder, currently, the information requested must be specified by at least one of the following research criteria: geographical location; threshold expressed in quantity, number, frequency or financial amount; payment method. The request may not relate to a reference period of more than eighteen months and this period may possibly be split up.
* 82 The main instrument is Directive 2011/16/EU of the Council of 15 February 2011 on administrative cooperation in the field of taxation, amended in 2014 and in 2015. The latter establishes all the applicable procedures: exchange of information on demand; spontaneous exchange; automatic exchange; participation in administrative enquiries; simultaneous controls as well as notifications of tax rulings. It also sets out the necessary tools, such as a secure electronic system for the exchange of information.
* 83 To exercise a non-nominative communication right at the request of another Member State, the requestedState must itself have the possibility to do likewise pursuant to its domestic law. Some European countries do not have a non-nominative communication right.
* 84 Source: Directorate General of the Treasury, Tallinn economic unit.
* 85 Possible exceptions rely on Article 4 of the Act No. 84-16 of 11 January 1984, which allows for the recruitment of contract workers when there is no body of civil servants able to carry out the corresponding functions, or for category A function, when the nature of the functions or the needs of the services demand it. Outside of this legislative reference, these hiring processes are standardised by instruction of the Directorate general of administration and public service (DGAFP) of 22 July 2013, and internal to the economic and finance ministries of 7 August 2013, which very strictly govern the terms of recruitment and in particular the administrative authoritiesto negotiate salaries.
* 86 Report by Michel Bouvard and Thierry Carcenac on behalf of the Finance Committee on the Management of public finance and human resourcesmission, Annexe No. 16 to the report carried out by Albéric de Montgolfier, general rapporteur, on the finance bill for 2017.
* 87 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and to the Committee of the Regions, A European agenda for the collaborative economy , 2 June 2016.