N° 481 SENATE ORDINARY SESSION 2016-2017 Registered at the Senate’s Presidency on 29 mars 2017 REPORT MADE in the name of the finance committee(1) on taxation and the collaborative economy: the need for a fair, simple and unified system. By Messrs Éric BOCQUET, Michel BOUVARD, Michel CANEVET, Thierry CARCENAC, Jacques CHIRON, Philippe DALLIER, Vincent DELAHAYE, André GATTOLIN, Charles GUENÉ, Bernard LALANDE and Albéric de MONTGOLFIER, Senators (1) This committee is composed of : Ms Michèle André, chair ; Mr Albéric de Montgolfier, general rapporteur ; Ms Marie-France Beaufils, Messrs Yvon Collin, Vincent Delahaye, Ms Fabienne Keller, Marie-Hélène Des Esgaulx, Messrs André Gattolin, Charles Guené, Francis Delattre, Georges Patient, Richard Yung, vice-chairs ; Messrs Michel Berson, Philippe Dallier, Dominique de Legge, François Marc, secretaries ; Messrs Philippe Adnot, François Baroin, Éric Bocquet, Yannick Botrel, Jean- Claude Boulard, Michel Bouvard, Michel Canevet, Vincent Capo-Canellas, Thierry Carcenac, Jacques Chiron, Serge Dassault, Bernard Delcros, Éric Doligé, Philippe Dominati, Vincent Éblé, Thierry Foucaud, Jacques Genest, Didier Guillaume, Alain Houpert, Jean-François Husson, Roger Karoutchi, Bernard Lalande, Marc Laménie, Nuihau Laurey, Antoine Lefèvre, Gérard Longuet, Hervé Marseille, François Patriat, Daniel Raoul, Claude Raynal, Jean-Claude Requier, Maurice Vincent, Jean Pierre Vogel. - 3 - S O M M A I R E Pages FOREWORD ............................................................................................................................. 9 SUMMARY OF THE MAIN PROPOSALS ............................................................................ 13 OVERVIEW: THE BLURRED LINES OF TAXATION AND SOCIAL CONTRIBUTIONS RULES GOVERNING ONLINE PLATFORM USERS I. AS REGARD TAXATION, ALL INCOME IS TAXABLE FROM THE FIRST EURO WITH VERY FEW EXCEPTIONS .......................................................................... 20 A. INCOME RECEIVED VIA ONLINE PLATFORMS DOES NOT BENEFIT FROM ANY SPECIAL TREATMENT ............................................................................................. 21 B. THE EXEMPTION OF SECOND-HAND SALES: CLEAR RULES BUT DIFFICULT ENFORCEMENT AND MONITORING ............................................................................. 26 C. THE EXEMPTION OF “COST-SHARING” BY THE TAX INSTRUCTION OF 30 AUGUST 2016: A WELCOME BUT TOO NARROW CLARIFICATION ..................... 27 II. AS REGARDS SOCIAL CONTRIBUTIONS, THE PROBLEM LIES IN THE DISTINCTION BETWEEN PRIVATE INDIVIDUALS AND PROFESSIONALS ....... 30 A. AMONG PLATFORM USERS, MANY PROFESSIONALS ARE UNAWARE OF THEIR STATUS .................................................................................................................... 31 1. Online platforms professionals: self-employed workers and micro-entrepreneurs .................. 31 2. The discouraging complexity of moving from non-professional to professional status low-stake online activities .................................................................................................... 32 B. TWO THRESHOLDS FOR COMPULSORY AFFILIATION TO SOCIAL SECURITY CREATED IN 2017: A USEFUL YET INCOMPLETE STEP FORWARD ........................... 35 1. Compulsory affiliation when income from rental of movable property exceeds EUR 7,846 and when income from rental of furnished accommodation exceeds EUR 23,000 ................... 35 2. A useful yet incomplete clarification, which does not cover sales or services ......................... 36 C. CORPORATE LAND PROPERTY TAX, A TAX THAT APPLIES TO ALL PROFESSIONAL WORKERS............................................................................................... 38 D. SOCIAL LEVIES, THE FORGOTTEN PART OF THE DEBATE? ...................................... 39 - 4 - TAXATION AND THE COLLABORATIVE ECONOMY : THE NEED FOR A FAIR , SIMPLE AND UNIFIED SYSTEM III. REPORTING, CONTROL AND COLLECTION: ........................................................... 40 A. SELF-REGULATION: AN ENCOURAGING YET INHERENTLY LIMITED RESPONSE ........................................................................................................................... 40 1. An effort by the platforms to identify professional users ....................................................... 40 2. The (sometimes) risky strategy of using “internal” criteria: the cases of Heetch and Blablacar ............................................................................................................................. 42 a) Blablacar: a rule based on the kilometric allowance scale, in accordance with the tax authorities’ doctrine ......................................................................................... 44 b) Heetch: an maximum amount of EUR 6,000 per year, with no legal basis ............... 45 B. UNACHIEVABLE TAX CONTROL ..................................................................................... 46 1. Insufficient efforts and unsuited tools for the digital economy .............................................. 46 2. A non-nominative communication right but still not applicable to foreign platforms ............ 47 C. THE OBLIGATION OF USER INFORMATION: A FIRST STEP TOWARDS TAX COMPLIANCE ..................................................................................................................... 49 1. Article 242 bis of the General Tax Code ................................................................................ 49 2. The challenge of platform certification .................................................................................. 52 D. AUTOMATIC INCOME REPORTING: THE DECISIVE STEP? ........................................ 54 1. Automatic reporting to the social security beginning in 2018: a voluntary system, lacking a strong incentive .................................................................................................... 54 2. Automatic reporting to the tax authorities in 2019: a mandatory system whose implementation is still uncertain ......................................................................................... 57 PROPOSALS: EXEMPTING SMALL TRANSACTIONS BETWEEN PRIVATE INDIVIDUALS, ENSURING FAIR TAXATION OF PROFESSIONALS I. A SINGLE THRESHOLD OF EUR 3,000 PER YEAR TO EXEMPT LOW, OCCASIONAL AND SIDELINE INCOME OF INDIVIDUALS ................................... 63 A. THE CHOICE OF A FIXED TAX ALLOWANCE ............................................................... 63 B. A SYSTEM THAT ECNOURAGES THE DEVELOPMENT OF THE SHARING ECONOMY, WITHOUT A THRESHOLD EFFECT OR A DISTORTION OF COMPETITION .................................................................................................................... 66 1. No threshold effect beyond EUR 3,000 ................................................................................. 66 2. No distortion of competition between professionals ............................................................... 66 3. Cost-sharing and second-hand sales would remain exempt, even above the EUR 3,000 threshold ............................................................................................................................. 69 C. JUSTIFICATION OF THE AMOUNT OF EUR 3,000.......................................................... 70 D. OBSERVATIONS REGARDING PROPORTIONALITY AND OTHER CONSTITUTIONAL PRINCIPLES ...................................................................................... 73 1. The principle of a single threshold is in line with the objective of accessibility and intelligibility of the law ....................................................................................................... 73 2. The limitation of the advantage to income derived from platforms and reported automatically is in line with the objective of combating tax fraud and tax evasion ................ 75 3. A measure general interest ground, with no alternative in the short term ............................. 76 - 5 - II. AN ALIGNMENT OF SOCIAL PROTECTION OBLIGATIONS .................................. 77 A. A SIMPLE AND UNIQUE CRITERION FOR DISTINGUISHING PRIVATE INDIVIDUALS FROM PROFESSIONALS .......................................................................... 77 1. Presumption of non-affiliation to Social security as a self-employed worker when income is less than EUR 3,000 per year ........................................................................................... 77 2. A criterion with no effect on the equality of treatment and the requirement of fair competition between professionals ........................................................................................ 81 3. Towards other “maximum social contribution thresholds”? ................................................. 82 4. Towards a collaborative worker status – eventually? ............................................................ 83 B. THE REMOVAL OF SECTOR-SPECIFIC OR GENERAL LIMITATIONS BELOW THE EUR 3,000 THRESHOLD ............................................................................................ 84 1. A presumption of permission to undertake a second activity for civil servants ...................... 84 2. Regularisation of movable property rentals between private individuals covered by the micro-BIC system ................................................................................................................ 84 3. Removing outdated constraints created for physical car boot sales ........................................ 85 III. AUTOMATIC INCOME REPORTING: