Legislation in the EEC

We have to be mindful of the writing of contracts for European companies. For companies outside the EEC: no change compared with the pre-1993 situation. The salesman (VRP) incorporates himself as a "fictitious employer" for the CCVRP (if he works for several companies) or URSSAF (if he only works for one company- sole agent). IRREP and IRPVRP (mandatory supplementary retirement pension).

The salesman (VRP) pays all the social charges but fiscally speaking is a salaried worker (he has to prove that his commissions are not subject to the VAT). For companies in and outside the EEC, the situtation changes according to the contract. In the event of a commercial agent, registration will be made at the Office of the Commercial Court. The commercial agent pays all the social charges towards non-salaried workers funds (incomes in non commercial profits and professional taxes) and is considered a professional, fiscally speaking.

He gets a VAT number from the tax authorities that he has to forward to his mandator and bills him the commissions without the tax, the VAT being paid by the mandator in his own country. He may incorporate a Sales Company and set up an agency contract, becoming a salaried employee of his own company provided that he is a minority partner. The sums received during the year that amount to less than €10,687.00 can be considered as incidental income (Subsidiary Revenues) and are not subject to the VAT. A simple note of commission to the mandator is sufficient, without providing him the VAT number. Administratively and legally, it is forbidden to work as a commercial agent and a salesman (VRP) at the same time.

Salesperson activity carried out in France for a foreign employer. For the salesperson who wishes to work for a foreign company and keep the benefits linked to the VRP position, there is an option other than that of commercial agent status which lies in using, as a VRP, the fictitious employer position. Indeed, if the foreign company does not wish, for reasons of administrative convenience, to deal directly with the French administration, the VRP can act in its place to carry out all incumbant obligations (registration, earnings reporting, fees payment, etc).

And of course, the foreign employer must first set up a written agreement establishing the rate of commission, taking into account the necessity of a good social protection (including retirement and death benefits, workers compensation, disability, and health care).

- For a mandator situated in a different country from the sales agent, commissions are billed excluding VAT.
- For a mandator situated in the same country as the sales agent, commissions are billed with the VAT included.