The Author of the Article
To keep in mind
This article explains the French import VAT rules, specifically the mandatory application of the reverse charge mechanism for all businesses importing goods from outside the EU.
Here are three key points to remember:
- Reverse charge applies to all imports: all businesses importing goods in France from non-EU countries are required to use the reverse charge mechanism for VAT.
- No pre-payment of import VAT: This eliminates the need for businesses to pre-pay VAT at customs clearance, potentially improving cash flow.
- VAT registration required: businesses must be VAT registered in France
VAT is due on the import of goods into Europe
When your business imports goods into Europe, it must complete customs formalities and also pay VAT to customs at the time of clearance. It can then be reclaimed under the VAT refund procedures. There may therefore be a delay between the time the VAT is paid and the time it is actually refunded.
Pre-financing of VAT can be avoided
In order to avoid this pre-financing of VAT, many European countries have introduced in their legislation the possibility to postpone the payment of VAT in the VAT return. Through this reverse charge technique, the import VAT is declared together with its claim for refund. The pre-financing of the tax is thus eliminated.
The conditions for the application of this reverse charge system are unfortunately left to the discretion of each European country.
What are the rules in France?
The rules in France were changed on 1 January 2022. Since this date, foreign companies importing goods into France must pay particular attention to the following:
- The reverse charge mechanism is automatic and mandatory for all businesses
- The importer's French VAT number must be entered on the import document
- The import VAT reverse charge must be reported in the French VAT return
The VAT expert's eye
Does your company import goods into France? It must register for VAT in that country in order to be able to reverse charge the import VAT on a local VAT return.
This VAT return will be pre-filled with the information provided by the French customs. The company must therefore ensure the accuracy of the data, for which it alone remains responsible, by implementing two means of control:
- Cross-checking the pre-filled data with the data made available on the French Customs website
- The implementation of corrective processes in the event that errors are detected
Navigate France's Import VAT Rules with Confidence: Partner with us
This can be challenging, especially for companies unfamiliar with French VAT procedures.
Our team of VAT experts can help you ensure smooth import processes and VAT compliance. Here's how we can assist you:
- Reverse charge application guidance: We'll analyze your import activities and advise you on whether the reverse charge mechanism applies to your transactions.
- VAT registration support: If necessary, we'll guide you through the French VAT registration process to ensure you meet all compliance requirements.
- Import VAT calculations and reporting: We'll assist you with accurately calculating and reporting import VAT under the reverse charge system.
- Ongoing compliance monitoring: We'll keep you informed of any updates to French import VAT regulations and ensure your ongoing compliance.
By partnering with us, you can confidently navigate the French import VAT landscape and avoid potential penalties. Contact us today for a free consultation and discuss how we can streamline your import operations.
We offer a free video conference to assess your situation and provide you with a tailored solution.