Changes regarding the French import VAT

1. Current import VAT rule

The current import VAT rule requires the payment of the import VAT to the customs office when importing goods into France and its subsequent deduction on the periodic VAT returns filed with the French Tax Administration (this regulation allows importers to deduct the import VAT on their sales tax returns filed between the 19th and the 24th day of the month following the import before actually paying this VAT to the customs office, usually by the 25th day of the month following the import).

This system is now challenged because it implies a disbursement of VAT due on imports.

2. January 1st 2015: implementation of the new import VAT rule

The new rule allows the application of the reverse-charge mechanism for the import VAT without actual payment.

Consequently, input and output VAT are automatically offset upon customs clearance.

This new option is managed by the customs office and applies for operators importing goods through a “Single Window Customs Clearance Procedure” (The “Single Window Customs Clearance Procedure” is a process applicable for companies importing goods in France through at least two different customs offices).

The reverse-charge of import VAT will represent around 2 billion euros per year (24% of the VAT collected by Customs excluding oil products).

We can provide French and foreign companies importing goods into France with our experience to ensure the compliance with French import VAT in connection with the French customs intermediary.