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E-merchants and sales via marketplaces: what to do in the event of a tax audit?

E-merchants and sales via marketplaces: what to do in the event of a tax audit?

Published on : 21/01/2026 21 January Jan 01 2026
Focus

For European tax authorities, one of the major challenges in the fight against VAT fraud is succeeding in reducing fraud in the e-commerce sector.

Over recent years, under the impetus of the European Commission, Member States have adopted several very significant reforms aimed at securing VAT collection on online sales. The e-commerce reform that came into force in July 2021 introduced several major changes: the development of the One-Stop Shop (OSS), the creation of the Import One-Stop Shop (IOSS), changes to certain territoriality rules, and the strengthening of the role of platforms in VAT collection (introduction of the deemed supplier scheme). Some of these developments will be continued and intensified with the implementation of the VAT in the Digital Age (VIDA) reform.

At the same time, Member States have strengthened their audit tools for online transactions and are increasingly issuing tax reassessments against e-merchants.

Without downplaying the importance of VAT fraud in e-commerce and while acknowledging the imperative need for enhanced controls, we nevertheless observe that some reassessments are unfounded, leaving good-faith e-merchants bewildered when they are notified of VAT reassessments.

It therefore seemed essential to present, in a concise manner, the key points for confidently dealing with a tax audit or reassessment.

Do not overlook procedural matters

In the field of e-commerce, tax audits most often concern cross-border transactions (distance sales). Tax audit procedures are therefore frequently initiated by a foreign tax authority. For example, a German e-commerce business that has understated the VAT collected on its taxable sales in France will be notified of a tax reassessment by the French tax authorities.

This situation creates several serious obstacles:
  • Notifications (proposed reassessments, requests for information, etc.) are drafted in the language of the auditing country (French, German, Italian, etc.). Many sellers do not understand the issues at stake or the applicable deadlines, which may result in a loss of defence rights.
  • Procedures are often unfamiliar, with each tax authority applying its own rules regarding response deadlines, mandatory formalities, appeal routes and evidentiary rules.
Returning to the example of a German e-merchant receiving a proposed reassessment from the French tax authorities: depending on whether or not it benefits from an extension of time to submit observations, he has 30 or 60 days from receipt of the proposal to submit his comments and, where applicable, challenge the proposed adjustments.

Failure to comply with this step has very significant consequences for the taxpayer:
  • The taxpayer is deemed to have accepted the proposed adjustments. This does not mean that they can no longer be challenged, but the burden of proof now lies with the taxpayer, and they forgo part of the guarantees offered by the adversarial procedure.
  • The tax authorities may proceed with collection of the amounts due. While retaining the right to file a claim, the taxpayer must then either pay the amounts claimed or apply for a stay of payment, which requires the provision of a financial guarantee.
Upon receipt of a notification from foreign tax authorities, the worst mistake is to procrastinate on the grounds that the content is not understood. On the contrary, it is essential to react immediately, understand the content of the notification and identify the applicable procedure.

Ensuring the reliability and documentation of transaction data

The vast majority of tax reassessments for which our clients have sought our assistance result from presumed discrepancies identified by the tax authorities between the turnover considered to have been declared by the taxpayer and the turnover data obtained by the authorities from platforms, through the exercise of their right of communication.

In other words, according to the data transmitted by the platforms, e-merchants are deemed to have carried out more taxable sales than those declared, leading the authorities to issue VAT reassessments corresponding to presumed understatements.

Without disputing the methodology used by the authorities or the existence of cases of under-declaration by certain taxpayers, we have nevertheless observed that:
  • The data transmitted by platforms to the authorities is not sufficiently detailed, making reconciliation with the transaction data held by taxpayers very difficult.
  • In some cases, the data transmitted by platforms is incorrect, often due to the inclusion of transactions that are not taxable (for example, B2B transactions or transactions taxable in another Member State).
  • In some cases, the data held by the authorities on the taxpayer’s declared turnover was incorrect or incomplete (for example, failure to take OSS returns into account).
It is therefore essential for e-merchants to maintain reliable, complete and well-documented transaction data throughout the reporting periods.
We therefore recommend retaining:
  • All transaction data communicated by the platform(s), if possible in a format allowing data processing.
  • If the e-merchant uses a service provider that aggregates platform data, all data provided by that service provider, preferably in a format allowing data processing. We stress that data from third-party service providers should supplement, not replace, the raw data available from the platforms.
  • All filing-related documentation (VAT returns, filing confirmations, proof of payment, reconciliation schedules, etc.).
The purpose of retaining all these elements is to facilitate, where appropriate, the challenge of the transaction data on which the authorities relied to issue reassessments.

While the fact that the authorities rely on non-detailed data may be criticised in light of the principles governing the burden of proof, it appears ill-advised to base a challenge exclusively on this argument. It is therefore recommended to also be in a position to challenge the accuracy and reliability of the transaction data used by the authorities, which requires having complete, reliable and properly documented data oneself.

Conclusion

In an increasingly complex regulatory environment and in the face of strengthened tax audits, the risk of VAT reassessment has become a reality for many e-merchants, including those acting in good faith. The technical nature of the applicable rules, the cross-border dimension of audits and the authorities’ use of sometimes imprecise data make these procedures particularly difficult to manage alone. Obtaining support from an expert with in-depth knowledge of e-commerce VAT and international tax procedures is therefore essential to safeguard taxpayers’ rights, effectively challenge unfounded reassessments and limit the financial consequences of a tax audit.
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