This is a deal that will make a big splash in the refurbished device sector. Back Market, one of the giants of this market, sent a letter to the General Directorate of Public Finances (DGFIP) at the end of October. He denounces unfair competition from the Cdiscount site which would have made it possible to promote smartphones resulting from VAT fraud. The company estimates the shortfall for the tax authorities at 500 million euros.
What Back Market criticizes Cdiscount
In detail, and as revealed BFM BusinessBack Market monitored its competitor for several months in order to identify illegal sellers. The latter establish themselves in Europe via shell companies and declare themselves as “European”.
And for good reason, e-commerce platforms are required to collect VAT for companies operating outside Europe. When they are located on the old continent, however, the sellers are themselves responsible for this operation. However, according to Back Market, a large number of these unscrupulous companies do not pay it.
Therefore, the prices displayed on Cdiscount are lower than those of its rivals. Our colleagues report, for example, that the prices of iPhones are 20 to 30% lower than those sold by Fnac, Amazon or Back Market.
These practices have caused effects in the reconditioned sector, specifies BFM Business. Thus, e-commerce platforms, and in particular Back Market, have lost 10% of market share. At the same time, Cdiscount posted excellent results with an increase in sales of 8% in the third quarter on its marketplace, while the latter had declined in the first and second quarters (4 and 2%).
Cdiscount defends itself
Heavily accused, the Casino subsidiary was keen to respond. Quoted by AFPshe emphasizes as follows: “Cdiscount’s policy on VAT collection is in full compliance with the regulations in force,” affirms the brand. In the event of suspected fraud, Cdiscount asks sellers to provide proof of tax compliance, and failing that, automatically charges VAT. »
The ball is now in the hand of the DGFIP. The Tax Authority had also asked the large platforms to step up their controls in this area at the start of the year.
What to remember:
- Back Market denounces its rival Cdiscount to the Tax Office
- He accuses him of allowing VAT fraud worth 500 million euros to go through
- The Casino subsidiary denies it outright and claims to respect the legislation
