France – Conditions for the Import VAT Reverse Charge Mechanism Removed

From 1st January 2022, France will abolish all requirements for businesses wishing to benefit from the reverse charge mechanism for import VAT.

This scheme allows VAT-registered businesses to apply to the French tax authorities for authorisation to use the reverse charge mechanism on imports. Once accepted, there is no obligation to pay import VAT when the goods are cleared in France and VAT is reported on the importing companies’ VAT return .

Currently, the requirements for using the reverse charge mechanism on imports are different for businesses established within the EU and those that are not.

The reverse charge mechanism is granted to companies established in the EU that:

  • have carried out at least 4 import operations into the EU Customs Union in the last 12 months,
  • have the capacity to demonstrate that they have a management/monitoring system for their customs and tax entries
  • have not committed any tax or customs offences in the last twelve months,
  • have had good financial standing over the last twelve months.

Non-EU companies must apply for authorisation via their customs representative (normally their shipping agent) who is established in the EU. The customs representative should also have the be an Authorised Economic Operator (AEO), which means that they have met certain criteria set by the EU customs authorities to benefit from preferential treatment and speed up customs clearance throughout the EU.

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