Since January 1st, 2017, taxpayers registered for VAT in France are allowed to request a specific authoritisation for reverse charging the import VAT through their periodic VAT return instead of pre-financing the VAT towards the Customs Authorities at the time of customs clearance.
This option is currently subject to prior authorization issued by the Customs Authorities (General Directorate of Customs and Indirect Taxes, hereafter DGDDI) and the importers applying for this authorization must meet the following conditions:
- have carried out at least four imports into the European Union in the 12 months preceding the application
- have a system for managing their customs and tax records that allows them to monitor imports
- prove that they have not committed any serious or repeated infringements of customs and tax provisions;
- demonstrate financial solvency.
For non-EU established taxpayers, the conditions are assumed to be met as soon as their Customs representative is AEO recognized.
As from January 1st, 2022, the above conditions will no longer have to be met and the reverse charge mechanism will become automatic.
This results from the transfer of competencies from DGDDI to DGFiP (General Directorate of Public Finances), including the transfer of the collection of VAT applicable to imports as of 2022, in combination with article 181 of the “Loi de finances pour 2020”.
In concrete, this means that the import VAT won’t be prefinanced anymore but will have to be self-accounted (ie. reverse charged) through the French periodic VAT return (ie. CA3 returns).
In order to ease the process, the import VAT due will normally be pre-filled in the online declaration based on the amounts of imports declared towards the DGDDI. It will however be up to the operators to:
- check and correct these amounts were needed
- manually add the taxable base related to non-taxable imports, if any
- complete the corresponding VAT deductible
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