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How to apply for reverse charge on import VAT?

After several amendments, the last regulation on reverse charge mechanism for import VAT provided by article 1695 of French Tax Code is a measure of competitiveness for companies in France.

The benefit of the reverse charge for import VAT is now largely open – under conditions – to taxable persons, who are liable for import VAT, whether or not they are established within the European Union (EU).

Reverse charge on import VAT for EU operators

For operators established in the EU, 4 criteria must be fulfilled:

  • To have carried out at least 4 imports within the EU territory during the last 12 months proceeding the application;
  • To have a system of managing customs and tax records to monitor import operations;
  • Not to have committed serious or repeated infringements on customs and tax regulations during the last 12 months preceding the application;
  • To have a satisfactory financial situation in the last 12 months preceding the application ( without any requirement of guarantee or caution ).

Conditions to apply for reverse charge mechanism on French import VAT have been eased to allow a larger number of taxable persons to self-assess import VAT, hence no longer bearing of this cost.

However, from a practical aspect, it’s essential to ensure that the 2nd condition is well fulfilled, considering that not every company has implemented a good practice as far as import declaration (Single Administrative Document) in their IT system, to ensure traceability.

French customs authorities have clearly indicated that operators holding the AEO status would be registered without further examination and within a short time limit; while other operators will not be subject to a customs audit. Another good reason to be certified as an AEO.

Operators established outside the EU: Be selective in choosing your customs representative

Operators established outside the EU are not allowed to directly lodge an application for reverse charge on import VAT.

To benefit from this measure, those companies have to appoint a customs representative holding the AEO-C status; in addition to their fiscal representative in charge of VAT formalities.

Our team specialized in VAT and Customs is at your disposal to perform the analysis and implementation of the reverse charge mechanism for the VAT supported on imports.

For more information, contact us !

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