Worth remembering
A company importing goods into Europe from a third country (USA, China, UK) must pay VAT when clearing the goods through customs.
In order to avoid pre-financing of VAT, many European countries have introduced the reverse charge technique for import VAT.
France changed its rules on 1 January 2022. The scheme is mandatory and automatic and all foreign businesses are now required to register for VAT 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
What is our advice?
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
Contact us
Any VAT question ?
We offer you the opportunity to discuss the subject during a free videoconference.