Changes to import VAT in France come into effect January 1, 2022
- Dec 2, 2021 | Alex Baulf
Use of the import VAT reverse charge will become compulsory in France with effect January 1, 2022. To administer this change, the management and collection of import VAT in France will be transferred from French Customs (DGDDI) to the French Tax Authority (DGFiP).
From this date, the declaration and payment of import VAT will be made directly in the French VAT return declaration instead of the customs declaration i.e. as a reverse charge self-assessed by the taxpayer. The use of the reverse charge for import VAT will be compulsory for all businesses registered for VAT in France (including non-taxable persons who have an intra-community VAT number) and there will be no prior authorisation to use this postponed import VAT procedure required.
The reverse charge procedure allows businesses to self-assess and deduct import VAT simultaneously in the VAT return without physically paying cash at the border. For most businesses, this will produce a nil net effect and no physical payment required. The French VAT return form and procedure will evolve to include details of imports. Key points to note are:
- The online VAT declaration will be pre-filled automatically with the amount of import VAT due (excluding the suspensive tax regime) based on the information previously declared to DGDDI on the customs declaration.
- The pre-filled VAT declaration will be available on the 14th of each month via the businesses’ online tax portal.
- A web portal will be set up by French Customs (via customs.gouv.fr) to allow businesses to download monthly details of all imports into France. To download the data, the importing business will need its French VAT Number and its SIREN number.
- The deadline for filing the VAT return will become the 24th of each month for all businesses liable for import VAT.
- Businesses will be responsible for verifying the pre-filled amounts, as well as completing the declaration of import VAT data not pre-filled automatically when a tax suspensive regime is used. Businesses should therefore ensure that they are in possession of the necessary data when validating the VAT declaration, especially if a registered customs representative is used.
- The pre-filled amount of VAT collected can be corrected where necessary.
- Businesses importing goods into France will need to communicate the French intra-community VAT number to their customs representative ahead of importation to ensure that the number is added to the customs declaration that is submitted to French Customs.
- Where an importer does not have a French intra-community VAT number, it should contact the tax authority to obtain this number as it will be needed on all customs declarations. For businesses based outside the EU, a fiscal representative may be required to be appointed.
Many EU countries now allow postponed import VAT accounting. The new French import VAT procedure appears very similar to UK Postponed VAT Accounting which started on January 1, 2021.
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