Import VAT Deferment
Businesses importing goods in France from non EU countries used to pay VAT in advance to their customs brokers. Even if import VAT was fully deductible, this process was not very favourable from a cashflow prospective.
From January 2022: impossible to import goods into France without a French VAT number
From 1 January 2022 onwards, the VAT due on imports will no longer be collected by the French customs Authorities but will automatically be reverse charged on the taxpayer’s French VAT returns. Import VAT will as result not be payable anymore to your French Customs brokers.
This reverse charge mechanism is certainly very beneficial for businesses as it allows to avoid heavy and costly pre-funding of import VAT. However all companies who act as the importers of records in France will have to obtain a valid VAT French number and file VAT declarations to be allowed to import goods into France and benefit from this system.
Companies who are eligible to the Import VAT deferment are :
- French companies. As they already have a French VAT number they will automatically benefit from the Import VAT deferment,
- Companies from French overseas territories and regions (DROM). If they do not already have a French valid VAT number, they will be automatically assigned one by the French Tax Authorities,
- Foreign companies, whether they are established or not in the EU. They will have the obligation to register for VAT in France.
How will it work ?
The amount of VAT due on importation (auto-liquidated / reverse charged) will be pre-filled by the tax authorities on the VAT return in France on the 14th of each month. For this reason, it will not be possible to file the VAT return before this date (companies with imports are concerned). This amount must be verified and possibly corrected, and then the VAT return must be filed no later than the 24th of each month (which follows the month of imports).
Is your company concerned by the new rules?
You are concerned if :
- You import goods into France and sell them domestically to French clients,
- You import goods into France and sell them to clients who are based in other EU Member States (except regime 42).
You are not concerned if : You import goods under customs regime 4200 through a limited tax representative.
Is your company not registered for VAT in France yet?
- Get in touch as soon as possible with our teams and apply for a French VAT number. For your guidance this process usually takes around 3 months.
- Discuss with RMB if they can act as your limited tax representative in France and use the regime 4200 arrangements.
Please note this mechanism is only applicable to goods that are being imported into France and subsequently sold or dispatched in any EU country but not in France after import customs. If your operations are eligible to the regime 42 arrangements, you will use RMB’s Global VAT number and would not have the obligation to register for VAT in France. This mechanism can be used on a long term basis for companies who never sell goods to French clients,
If your company sells goods to both French and other EU clients, regime 4200 can be an interesting provisional solution before your company gets registered in France.
Contact us by email or call us directly +33 3 20 25 70 70.
If you want more information about this topic or if you plan to have imports of goods on French territory, please feel free to contact our experts. Also, do not hesitate to contact us about similar possibilities in Belgium, Netherlands or other EU-countries that provide these kind of advantages to non-resident businesses. Contact us by email or call us directly +33 3 20 25 70 70.