France – Changes in relation to import VAT & VAT group

Import VAT:

The reverse charge for import VAT will be generalised as from 1 January 2022. This means that there is no requirement to ask for a specific authorization from the customs authorities as required previously. 

Furthermore, the management and recovery of the import VAT will be transferred to the responsibilities of the Direction générale des Finances publiques (DGFiP – France’ General Directorate of Public Finance (i.e. the customs authorities are no longer responsible for this). The reverse charge will be reported by VAT registered entities in the VAT return and will bring cash-flow advantages. In addition, as from 1 January 2022 it will be mandatory to transfer the import VAT collection to the VAT return for all taxable persons in France with FR-VAT-No. (transfer procedure).

VAT group: France is planning to introduce the concept of VAT grouping as from 1 January 2023. The purpose of the VAT group is to neutralize intra-group transactions for VAT purposes. Thus, the new regime would have a significant impact on the cash management of VAT groups.

Image source: http://unsplash.com

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