B. UNACHIEVABLE TAX CONTROL
1. Insufficient efforts and unsuited tools for the digital economy
Given the new forms of exchanges made possible by online platforms, the tax authoritiestraditional tools appear to be inadequate.
Indeed its methods rely on retrospective tax control, which is appropriate in a situation where a small number of taxpayers with significant amounts at stake are targeted, but they become much less effective in a situation where a great number of taxpayers need to be controlled, where individually only a small amount is at stake, but overall totalling a significant amount . That said, as regards between private individuals on collaborative platforms, losses of tax income are probably not as great as in the case of small professional sellers present in virtual marketplaces, especially in third countries, which can easily avoid paying corporation tax and VAT 45 ( * ) . In addition, the very features of the digital economy complicate the task: use of pseudonyms, change of email address, presence on multiple platforms etc.
The main tool of tax control, the communication right (droit de communication) , provided for in Article L. 81 of the Book of Tax Procedures (LPF), allows tax inspectors to obtain the necessary information from third parties. Generally, demands are sent to employers, customers, suppliers, or banks holding accounts etc. In the collaborative economy, it can be exercised in respect of platforms and payment intermediaries. It suffers, however, from two major weaknesses:
- firstly, it presupposes at least knowing in advance the identity of the person in question , and if possible what question to ask, which is by definition difficult in the context of the digital economy;
- secondly, it has no extraterritorial scope , and is therefore open to a refusal from platforms located abroad.
Therefore, the only way of obtaining the information is through international administrative assistance which involves lengthy procedures with partners whose zeal is highly variable, and which therefore can be justified only where the amounts in question are significant. This procedure is ill-suited to the online platform economy and its many users , and the hearings of the Working Group have confirmed that the authorities do not consider it to be a relevant solution.
Apart from the inherent weaknesses in the traditional tax control tools, it appears more fundamentally that both the tax administration and the Government are taking a long time to get to grips with this subject , as shown, in particular, by the debates on the Finance Bill for 2015, on the bill in favour of a Digital Republic, and on the Amending Finance Bill for 2016.
2. A non-nominative communication rightbut still not applicable to foreign platforms
Notable progress was however made by Article 21 of the Amending Finance Act No. 2014-1655 of 29 December 2014 for 2014 , which established a communication right on information relating to not specifically designated persons , codified in the second paragraph of Article L. 81 of Book of Tax Procedures.
This non-nominativecommunication right allows the tax administration to request information from the actors of the Internet (platforms, third party payment, express freight operators, etc.) without first knowing the identity of the person or persons concerned. For example, an online platform is allowed to be asked for information about persons having sold an item of property X or rented an item of property Y during 2016 and having received more than EUR 3,000 for this purpose . The request for information can therefore relate to their sales, their customers, their transactions or their suppliers, etc.
Decree No. 2015-1091 of 28 August 2015 specifies that 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 relate to a maximum reference period of eighteen months, and this period can be split up.
During the discussion in public sitting, of the Amending Finance Bill for 2016, the Secretary of State responsible for the budget, Christian ECKERT, stated that the non-nominative communication right as it exists is very useful. Between 1 September 2015 and 1 September 2016, we have made use of this right 105 times with respect to the digital economy . The procedure covered 40 companies involved in managing rented furnished accommodation, 26 companies managing electronic platforms enabling customers to contact taxis and transport vehicles, in particular private hire drivers, 20 online marketplaces, 10 firms carrying out transport of goods and logistics services, 7 companies offering online payment services or the transfer of funds online, and 2 agencies collecting online advertising income for people making and publishing video content on the Internet. We are already using all this information. I will keep available to you and to the General Rapporteur of the Finance Committee of the Senate, who asked me about this the progress reports, which are changing all the time, of these operations .
The information conveyed to the General Rapporteur, a member of the Working Group, confirm these figures . However the hearings conducted subsequently by the Working Group showed that this non-nominative communication right has not yet resulted in the challenges posed by the online platform economy being met. At the very least, its implementation is still too recent to be able to assess its effect in terms of tax revenues.
In reality, the non-nominative communication right does not make up for the main weakness of the classicright of communication, i.e. its lack of extraterritorial scope . Although some of the main actors of the collaborative economy currently have subsidiaries in France, and therefore permanent establishments, the contracts themselves are still concluded with companies established outside France, particularly in Ireland, Luxembourg and the Netherlands, meaning that they do not consider themselves bound by the communication right 46 ( * ) .
In fact, most major foreign platforms, to date, have refused to respond to the requests of the tax authorities, even though their French competitors, often smaller, have complied with their reporting obligations.
With regard to social contributions, the URSSAFs can also assert a non-nominative communication right , provided for in the Social Security Financing Act No. 2014-1554 of 22 December 2014 and based on the same model as that of the DGFiP. It is subject, however, to the same limitations as those of the tax authorities .
According to the hearings conducted by the Working Group, it is envisaged to make use of this non-nominative communication right to check whether the two affiliation thresholds laid down by the Social Security Financing Act for 2017 have been crossed, i.e. EUR 7,846 for movable property rentals and EUR 23,000 for furnished accommodation rentals (see above). Given the foregoing remarks, it is reasonable to believe that automatic reporting would be more effective.
* 45 See, in this regard, 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.
* 46 The only way to get round this obstacle is to carry out a tax search, in the professional premises, on the basis of Article L. 16 B of the Book of the Tax Procedures, which, in particular, can be used to obtain the data that can be accessed via the servers of the premises visited but this is still a cumbersome procedure, subject to permission granted by a judge, and therefore unsuited to the dispersed nature of the collaborative economy.
This procedure is however relevant with regard to the corporation tax of the platforms themselves, in order to characterise the existence of a permanent establishment. However it is a one-off tool, since the company has an interest in reorganising its legal structure following a search tax.