The VAT refund procedure is accessible to any foreign company not established in France under the conditions provided for by Directive 2008/9/EC (8th Directive) for companies established in an EU Member State and 86/560/EEC (13th EU Directive) for any foreign company not established on EU territory.
Here is an overview of the VAT refund process for foreign companies using showrooms in France.
Who can request a VAT refund?
Foreign companies not established in France and which do not carry out taxable transactions can, under certain conditions, obtain French VAT refund charged on the acquisition of movable property and services for professional purposes.
VAT refund is subject to compliance with the following conditions:
1. Absence of head office, permanent establishment, or residence in France
2. Absence of deliveries or services taxable in France
3. Non-tax residence: the company must prove that it is not established for tax purposes in France.
4. Taxable transactions: transactions for which VAT is refunded must be taxable in France.
The case of foreign companies using showrooms in France:
Foreign companies which organize showrooms can also claim VAT refund incurred in France which was invoiced to them.
VAT refund procedure for foreign companies:
1. Collection of documents: the company must keep all invoices and supporting documents related to their expenses
2. Refund request: usually, VAT refund requests must be submitted to the French tax authorities once a year.
3. Examination of the application: the French tax authorities will examine the application, verify the documents provided and may request additional information if necessary.
3. Once the VAT refund request has been examined, the tax authorities may, if they consider it necessary, request additional information.
4. Refund: If the request is accepted, the VAT can be refunded to the foreign company.
Important points to consider for VAT refund in France:
It is imperative to respect the deadlines for submitting the refund request provided for by the regulations, because non-compliance with the deadlines may result in the refund being rejected.
Due to the complexity of tax rules, it is recommended to consult a professional such as Eurotax to ensure compliance with current regulations.
Foreign companies in France can benefit from VAT refund if they respect the conditions set out and follow the procedure established by the French tax authorities. However, each situation can be unique, so it is recommended to go through a professional such as Eurotax in order to comply with VAT refund requests.