VATLive > Blog > France > France rejects VAT Fiscal Representative withdrawal

France rejects VAT Fiscal Representative withdrawal

  • Jan 3, 2020 | Richard Asquith

The French Inspection Générale des Finances (‘IGF’) has recommended not withdrawing the requirement of non-EU businesses with a French VAT registration to appoint a Fiscal Representative. The obligation to appoint a French agent, with joint and several liability for missing taxes, was imposed in 1979. The largest volumes of non-EU VAT registered businesses are from (in order of numbers): the United States; China; and Switzerland.

The IGF reviewed the requirement due to problems with the operation of the regime:

Due to the high risks involved, the market has been reduced to around just 10 fiscal reps with any serious number of clients – 200 to 300. This tends to drive up fees and make compliance a challenge.

The ballooning of French e-commerce trade has introduced a large number of non-EU sellers who are not aware or ignore the requirement. This is associated with large amounts of VAT fraud, and can create an unlevel playing field in terms of costs for honest traders. The French National Directorate of Tax (DNEF) Investigations has recorded 43,188 Chinese VAT registered business recently compared to just 6,619 in 2017. DNEF still estimates that the vast majority of foreign sellers operating through marketplaces in France are not VAT registered.

France’s imposition from 2020 on marketplaces the obligation to check sellers’ VAT registrations and report transactions is expected to sharply increase the number businesses needing a French fiscal rep. This will create major problems given the limited number of willing agents. This in turn will slow down businesses getting registered, and being able to lawfully settle their VAT bills.

The IGF however rejected withdrawing the requirement on the following points :

  • The 2020 French marketplace liability rules only apply to transactions on their platforms, and leave a large proportion of unreported transactions
  • The tax office still believes the role of the fiscal rep is useful as it regularly results in successful additional payments of missing VAT
  • Fiscal reps, being highly experienced in VAT matters, speed-up the registration process and so alleviate the major surge of applicants for the 2020 marketplace liability rules.
  • Fiscal rep costs, estimated by IFG, at €1,000 and €3,000 per annum, was not considered substantial based on the revenues made be traders
  • In 2016, the UK has introduced fiscal rep obligations for sellers deemed as ‘risky’ by the HMRC tax authorities. This shows the international trend is towards more fiscal rep-like obligations.

Whilst IGF concluded that fiscal rep must not be withdrawn as an important control on the growing e-commerce VAT fraud problem, recognised it could be modernised:

  • Marketplaces could be made fiscal representatives for that element of the VAT on their platforms.
  • The VAT affairs of foreign companies in France could be centralised at the to the non-resident tax department (DINR) to ensure consistency of rule enforcement
  • Allowing registration applicants and returns to be signed by electronic signatures
  • Loosening of the French-language only requirements for applications

Role of the Fiscal Representative

Fiscal Reps are a special type of local VAT agent. They share the same responsibilities and liabilities for VAT as their client, the registered non-EU business. As a result of this shared liability to missing VAT and associated penalties, they typically charge relatively high fees and require a bank guarantee or cash deposit. The requirement provides the authorities with a local point-of-contact and co-respondent in the case of missing VAT through error or fraud. 19 of the EU 28 member states require non-EU businesses to appoint a fiscal representative agent. Under the EU VAT Directive, member states may not oblige taxpayers from other EU states to appoint a fiscal rep.


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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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