Operators importing in France have various options in order to facilitate the payment of import VAT.
A recent facilitation was brought by the reverse charge mechanism, which can be used by importers not to pay import VAT to the French Customs authorities at the time of custom clearance, and instead declare the VAT due directly in their French VAT monthly report (CA3) following the importation.
Benefit from this mechanism requires the fulfillment of various conditions, set out in the French Loi de Finances Rectificative pour 2016:
– French companies and companies established in the European Union, identified for VAT purposes in France, must:
- have carried out at least four imports into the EU in the 12 months preceding the request (these can be into any EU Member state);
- have a system (of internal control) in place to manage customs and tax filings and documents which allow the taxpayer to fully track its importations;
- not have committed any serious or repeated breaches to customs or tax rules in the last 12 months; and
- have been financially solvent in the 12 months preceding the request to apply the reverse-charge mechanism.
– Non established companies must appoint a custom representative established in the European Union, who will submit on their behalf a request in order to use the reverse-charge regime.
Another facilitation, to be used with precautions, is the so called ‘Regime 42’, described in article 291 III 4° of the French Code Général des Impôts. This mechanism enables importers to delay the payment of import VAT of goods imported in France, where those goods are delivered in another EU Member State immediately after import. In that case, the goods are subject to an intra-EU delivery, exempted from VAT. Import VAT will be paid in the EU country of destination of the goods. To use this facilitation, the importer or its representative must submit its VAT identifier and the VAT identifier of the customer in the Member State of destination to the authorities of the Member State of import, as well as a proof that the imported goods are intended to be transported or dispatched from the Member State of import to another Member State.
On July 4th, 2019, the regional customs service of Marseille has sent a note to operators informing that it was not possible to benefit from regime 42 retrospectively, even if the importer could prove the intra-EU delivery. Application for the benefit of regime 42 must be done at the time of import declaration.
Under such conditions, the regional customs service of Marseille inform that it is impossible to obtain a refund of the import VAT paid where goods are put under free circulation at the time of a customs clearance. In this case, the VAT can only be deducted by the operator in its monthly CA3 declaration.