B. THE EXEMPTION OF SECOND-HAND SALES: CLEAR RULES BUT DIFFICULT ENFORCEMENT AND MONITORING
As regards taxation, second-hand sales are exempt from income tax . Under the terms of Article 150 UA of the General Tax Code, gains realised when selling movable goods or rights relating to these goods are exempt provided their sale price is not greater than EUR 5,000 16 ( * ) . Household furnishings, household appliances and cars are exempt regardless of their sale price.
This exemption is implied by Article L. 110-1 of the Commercial Code, which defines, in particular a commercial transaction as any purchase of movable property for resale , either in its original condition or after having transformed and used it : a second-hand sale is therefore where a private individual sells an item of property that he previously acquired or received for his own use, and not for the purpose of reselling it.
The distinction between second-hand and commercial sales is of great importance given the many fake private individualspresent on some online marketplaces , and in particular on those that request little information from their sellers and/or who are not intermediaries in the transaction. In these situations, there are significant losses of tax revenue, not only as regards income tax or corporation tax, but also in relation to VAT 17 ( * ) , as well as manifest distortions of competition.
However, for private individuals acting in good faith, it is not always obvious whether a sale is of a casual or professional nature. Above the EUR 5,000 limit, and whenever the activity is carried on, on a regular basis , the private individual is, indeed, subject to income tax, and must in principle affiliate himself to the self-employed workerssocial security system (RSI) as a trader, and, if applicable, as a micro-entrepreneur. The question of determining the regular nature of the activity arises then with the same complexity as for the other income (see above).
During the Working Groups hearings, the tax authorities argued that the legal position was clear, and that it was unnecessary to change it: whenever a sale is not a second-hand sale, it is taxable . This is a self-evident truth: The question does not concern the principle but the criteria for making the distinction and effective enforcement of these criteria, in a context where it is impossible to monitor whether taxpayers comply with their declarative obligations (see below).
In addition, sales between private individuals on online platforms such as Leboncoin , eBay and Vide-Dressing are subject to the provisions governing jumble and car boot sales , designed at a time when this type of trading was occasional and exclusively physical. Article L. 310-2 of the Commercial Code thus provides that private individuals not registered in the commercial register are allowed to participate in jumble and car boot sales for the exclusive purpose of selling personal and used objects at most twice a year .
Article R. 3219 of the Criminal Code also specifies that the organiser therefore in theory the online platform must keep a register which includes the last name, first names, capacity and address of each participant, as well as the nature, number and date of issue of the identity document produced by the latter with an indication of the authority which issued it and, for non-professional participants, an indication of the deposit of a sworn statement of non-participation in two other events of the same kind during the calendar year.
In its report of May 2016 on collaborative platforms, employment and social protection (see below), the General Inspectorate of Social Affairs (IGAS) rightly considers that this formalism and the limitation to two sales per year no longer seem to match the situation of the practices of the digital society , the use of collaborative platforms now being very widespread by private individuals .
* 16 Unless they are precious metals.
* 17 See Report No. 691 (2014-2015), E-commerce: proposals for VAT paid at source , 17 September 2015, written by Michel Bouvard, Thierry Carcenac, Jacques Chiron, Philippe Dallier, Jacques Genest, Bernard Lalande and Albéric de Montgolfier, general rapporteur.