France: deferral of import VAT will be automatic

France is changing the conditions for deferring import VAT. As of 1 January 2022, import VAT is automatically deferred in France and will be accounted for via the Reverse Charge mechanism.  

To simplify the process, VAT due will be pre-filled on the applicable online declaration. 

Previous conditions for deferring French import VAT 

Previously, a number of conditions had to be met before an importer was authorised to defer import VAT. Notably, traders had to have undertaken a minimum number of imports into the EU in the preceding 12 months. They also had to demonstrate they had not breached customs regulations. 

Cash flow benefits of deferring VAT

Deferring import VAT offers a cash flow advantage to traders. Rather than paying up front at the point of import, the deferment enables you to account for VAT on your regular returns. In practice, input VAT and output VAT effectively balances out (as import VAT is reclaimable). 

It is advisable to consult a VAT specialist to  ensure that you manage your cash flow effectively and don’t miss any opportunities to reclaim VAT.

Filing a VAT refund in France

France also recently amended the procedure for claiming a VAT refund if you are based outside of the EU. As of July 2021, non-EU businesses are required to file a digital 13th Directive claim. The claim must include scanned copies of the relevant invoices and supporting documents. 

Optimise VAT compliance and recovery

The VAT refund process is complex, time-consuming and constantly changing. Moreover, erroneous submissions will not be accepted and mistakes and oversights can lead to penalties.

As the world’s VAT recovery specialists, VAT IT ensures you optimise your import processes, comply with all VAT obligations and maximise your VAT recovery opportunities, every time.