France – changes in VAT

French reverse charge for import VAT

From 01 January, 2017, within a French VAT return import VAT will be allowed to be reverse charged, only if a license is obtained from the French tax authorities.

Economic operators who are accredited will be deemed to comply with all four conditions valid to benefit from this simplification, although a separate application is still essential for these taxpayers. A customs representative will have to be appointed by non-EU companies to benefit from this regime.

Import VAT is normally paid upon arrival of the goods. Nevertheless, to recompense for the cash flow drawbacks of these rules, most countries allow some kind of simple interpretation where this VAT is either paid at a later stage (so called ’import VAT deferral allowance’), or VAT is reverse charged in the next VAT return of the business importing the goods. This structure is frequently referred as ‘postponed import VAT accounting’.

‘VAT Registration Thresholds’ have been increased in France

The French ‘VAT Registration Threshold’ has been raised from €32,600.00 to €33,200.00 for annual turnover per year. There are certain industries, such as, purchase and resale activities have a higher threshold of €82,800.00, where the goods or services are for domestic use only; a higher threshold of €42,900.00 will also benefit lawyers and solicitors.

The new thresholds will apply to only small and medium established French companies. For foreign non-established businesses, this is slightly different. They must register for VAT purposes as soon as the first taxable transaction is made.

Furthermore, registration thresholds for SME should be distinguishable from distance sales registration thresholds. These will only apply to online sales of goods shipped from another EU Member State to a French customer who is not VAT registered. In these cases, a registration will only be required if annual sales exceeds €35,00.00.

To find out more information please visit amavat.eu