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published on 17 December 2021 | reading time approx. 3 minutes
Are you a foreign company registered or not registered for VAT in France, and if so, have you anticipated your declarative obligations regarding the importation of goods into France from 2022? The Finance Law for 2020 and the draft Finance Law for 2022 are at the origin of important reforms in the field of customs and VAT. Among these measures, one in particular should be highlighted, namely the reform of the reporting and collection of import VAT which will come into force on 1 January 2022.
Indeed, this measure is a source of new reporting obligations for taxable persons and in particular for taxable persons not established in France, which must be anticipated and implemented as of 1 January 2022.
Resulting from the 2020 Finance Law, the import VAT reform will come into force on 1 January 2022. Indeed, as from this date, the management and collection of VAT applicable to imports and exits from suspensive regimes will be transferred from the customs authorities to the DGFIP, which will simplify matters for businesses.
The DGFIP will thus become competent for the management and collection of VAT due:
Consequently, the customs authorities will remain competent only for the collection of VAT due in respect of imports by non-taxable persons into France and in respect of the transport of passengers and goods by non-taxable persons between France and countries outside the European Union.
This new reverse charge mechanism is compulsory and automatic for all taxable persons identified for VAT purposes and for all taxed or non-taxed transactions. Consequently, taxpayers wishing to carry out import operations in France will have to ensure that they are identified for VAT purposes in advance with the French tax authorities.
The main consequence of this transfer of competence is the generalisation of the VAT reverse charge procedure. At present, import VAT is paid to the customs authorities at the time of customs clearance and is only deducted at a later stage when the VAT return is drawn up, which results in cash flow differences that can be significant for businesses.
From 1 January 2022, the declaration and payment of import VAT will be made on the VAT return and no longer in support of the customs declaration. As a result, businesses will be able to simultaneously collect and deduct import VAT on the CA3 putting an end to the constant cash advances.
Another important consequence of this reform is that the DGFIP becomes competent for the control of VAT due on importation, which automatically entails the competence of administrative courts and no longer judicial courts for litigation in this field.
With regard to the reporting procedures, it should be noted that taxpayers who carry out imports, intra-Community acquisitions of goods or exits from tax warehouses will henceforth be excluded from the simplified VAT taxation scheme and will therefore be required to submit monthly returns. However, the draft Finance Law for 2022 qualifies this measure by providing that quarterly VAT returns will be allowed when the annual VAT liability is less than €4,000.
As for the customs declaration procedures for imports (regime code, complementary regime code, special mention, national additional code, document code, etc.), they remain unchanged except for the obligation for the person liable for payment to identify himself on the customs declaration. Indeed, the French intra-Community VAT number of the person liable for payment of import VAT will henceforth have to be communicated on all customs declarations relating to import and exit operations from suspensive regimes, whether taxed or not.
This reform is accompanied by a number of simplifications designed to facilitate the procedures for businesses, since the online VAT return will be pre-filled on the 14th of each month with the import VAT taxable bases, payable in respect of taxable imports carried out during the previous month, based on the data contained in the customs declarations. Businesses will be required to complete the declaration of taxable and non-taxable bases and amounts due in respect of exits from suspensive arrangements, together with the related deductible VAT amount.
In addition, in order to allow taxpayers to check the information pre-filled in the VAT return, the customs authorities will provide them with a dedicated space on the customs.gouv.fr website accessible through a personal account created on this portal. Taxpayers will be able to download a table containing the data from the customs declarations.
It should be noted that in the event of a request for regularisation of a transaction subject to this new system, it will be up to the taxpayers to first rectify the customs declaration with the customs authorities and then declare the VAT regularisation to the DGFIP.
Aurélia Froissart
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