Dropshipping in France offers entrepreneurs an attractive way to start an online business without major upfront investment. However, success depends on strict compliance with French and EU laws. From dropshipping legal requirements to VAT thresholds and the Finance Act of 2024, understanding legislation is essential to operate safely and sustainably.
What is Dropshipping?
Dropshipping in France is a form of online retailing that sits between two sales models:
- Traditional e-commerce (distance selling): where a retailer sells products directly to the customer through their own online store.
- Marketplace model: where platforms such as Amazon or eBay act as intermediaries, connecting third-party sellers with end customers without being the direct sellers themselves.
In the case of dropshipping, the dropshipper is legally regarded as the final seller. They are responsible for the commercial transaction with the customer, even though they never handle the stock themselves. Instead, the supplier manages inventory, packaging, and shipping. The dropshipper only places the order with the supplier once a customer has made a purchase.
Dropshipping Legal Requirements in France
If you are wondering “is dropshipping legal in France?” the answer is yes, but there are several dropshipping legal requirements that entrepreneurs must follow to remain compliant. Below are the key requirements.
Legal Notices on the Website
The first step when launching a dropshipping business in France is to include mandatory legal notices on the website. This ensures transparency by clearly identifying the person or company behind the online store. The information that must include:
- Full identity of the business owner: name, postal address, phone number, email, legal structure, and share capital (if applicable).
- Identity of the web hosting provider.
- Information about cookies.
- Details about how personal data is collected and used (GDPR compliance).
General Terms and Conditions of Sale (T&Cs)
Another key requirement under legislation on dropshipping in France is publishing clear and accessible General Terms and Conditions of Sale (GTC). These regulate the commercial relationship between seller and buyer and are mandatory under Article L111-1 of the French Consumer Code.
The T&Cs must include:
- Pricing and payment terms.
- Delivery and return policies.
- Legal guarantees.
- The 14-day withdrawal right (mandatory under EU law).
They must also be written in a way that is “readable and understandable,” and be easily accessible to customers (ideally from the homepage).
Dropshipping Contract with Suppliers
To avoid disputes, it is strongly recommended to establish a dropshipping contract with your suppliers. This document defines the obligations of both parties, such as product quality, delivery times, and liability in case of issues.
Without a written agreement, resolving conflicts, especially with foreign suppliers, can be extremely difficult. Negotiating clear clauses upfront helps secure your business and protect your customers.
Can You Get in Trouble for Dropshipping in France?
While dropshipping in France is legal, it can lead to serious penalties if carried out in violation of consumer protection laws. According to legislation on dropshipping in France, this business model becomes illegal when it involves unfair or deceptive practices.
When is Dropshipping Considered Illegal?
Under Article L.121-1 of the French Consumer Code, an unfair commercial practice is defined as conduct that goes against professional diligence and misleads or pressures consumers into making purchasing decisions they otherwise would not have made.
Dropshipping may be penalized if it falls under:
- Deceptive practices: such as misleading product descriptions, fake claims about product quality, or creating confusion with another brand.
- Aggressive practices: including repeated solicitation or applying undue pressure on consumers.
- Lack of transparency: for example, when the seller hides their identity, fails to provide clear general terms and conditions, or does not comply with consumer law obligations.
Penalties for Illegal Dropshipping
The consequences of operating outside the law can be severe.
- Unfair commercial practices can result in fines of up to €300,000 and two years of imprisonment for individuals, or up to €1.5 million for companies.
- Failure to display mandatory legal notices or non-compliant T&Cs may lead to one year of imprisonment and fines up to €75,000.
The DGCCRF (French consumer watchdog) has already flagged several abusive practices linked to dropshipping, including:
- Fake customer reviews.
- Misleading claims about product characteristics.
- Reference prices that do not reflect actual market prices.
- False or exaggerated promotional offers.
These examples demonstrate that although dropshipping legal requirements are straightforward, non-compliance can quickly escalate into legal trouble.
VAT Rules for Dropshipping and Distance Selling in France
When considering how to legally start a dropshipping business in France, understanding your tax obligations is essential. VAT applies to all forms of distance selling in France, including both traditional e-commerce and dropshipping in France. Regardless of whether you are a registered business or an individual entrepreneur, you are responsible for declaring and paying VAT.
VAT Rules for Distance Sellers in the EU
Since 1 July 2021, the VAT One Stop Shop (OSS) scheme has made it easier for e-commerce and dropshipping businesses to comply with EU tax rules. Here’s how it works:
- Sales below the EU threshold: Businesses declare and pay VAT in their home country (for example, a French business charges and pays VAT in France).
- Sales above the threshold: Once sales exceed the set limit, VAT must be declared in the customer’s country of residence (for example, a French dropshipper selling to a customer in Germany must pay VAT in Germany).
- All declarations can be filed through the OSS portal, which centralizes reporting obligations.
The Finance Act of 2024: Key Measures for Dropshipping in France
To address the rapid growth of e-commerce and new business models like dropshipping, the government introduced the Finance Act of 2024. This law establishes stricter rules and reporting obligations for distance sales, especially when goods are imported from non-EU countries.
Dropshipping and VAT Avoidance
Previously, many online sellers attempted to avoid VAT by sourcing products directly from suppliers in non-EU countries and shipping them straight to French customers. The Finance Act of 2024 closes this loophole.
According to Article 112, I-A and G, when the conditions for import taxation are not met, VAT becomes payable in France and must be covered by the seller.
Furthermore, certain distance selling transactions that were once treated as occurring outside the EU are now considered “territorialised” in France. This means they fall under French VAT rules, particularly when the VAT due on imports would otherwise be lower than the amount payable for a sale within France.
VAT Thresholds for Online Sales in France and the EU
The €10,000 EU Distance Selling Threshold
Since 1 July 2021, the EU has applied a common distance selling threshold of €10,000 per year.
- Below €10,000: If a French dropshipper’s annual sales to EU customers remain under this limit, they apply French VAT to all transactions, even if products are delivered abroad (e.g., to Germany or Spain).
- Above €10,000: Once sales across the EU exceed this threshold, the seller must apply the VAT of the customer’s country of delivery. For example, if a French seller ships to Germany after surpassing €10,000 in EU sales, they must apply German VAT to those sales.
This rule ensures fairer competition and closes loopholes that previously allowed sellers to avoid proper VAT payments.
Basic VAT Exemption Thresholds in France
In addition to the EU-wide rules, legislation on dropshipping in France also provides for national VAT exemption thresholds. Small businesses can benefit from a basic VAT exemption scheme, which allows them not to charge VAT until their sales exceed certain limits.
- Supply of services: €37,500 (increased to €41,250 during a grace period).
- Purchase and resale of goods: €85,000 (increased to €93,500 during a grace period).
Once these limits are exceeded, dropshippers must begin charging VAT on their sales.
How to Declare VAT for Distance Selling
To simplify compliance, the EU introduced the VAT One Stop Shop (OSS) and Import One Stop Shop (IOSS) systems:
- OSS (for EU businesses): Allows dropshippers to declare and pay VAT for all EU sales through a single online portal.
- IOSS (for non-EU businesses): Simplifies VAT declarations for goods imported from outside the EU.
In France, VAT declarations can be submitted online through the official tax portal using form no. 3517-S-SD.
While dropshipping in France is legal, ignoring consumer protection rules, VAT obligations, or the Finance Act of 2024 can result in heavy penalties. To legally start a dropshipping business, entrepreneurs must ensure transparency, respect tax legislation, and protect customers. Compliance fosters trust, avoids sanctions, and supports long-term growth in e-commerce.