RECLAIMING IMPORT VAT IN FRANCE
Goods imported into France from a non-EU country must be cleared for customs when they reach the French borders (International Airports or Sea Ports).
The customs declaration is usually prepared and filed by an appointed carrier or freight forwarder. This procedure gives rise to import duty and taxes levied by the Customs Authorities. Let us remind that import duty is levied on a good having a minimum value of €150 and import VAT is due on a product valued at least at € 22. Small goods with a value under the mentioned thresholds are exempt of duty and taxes, except in case of mail ordering.
In the course of international commerce, it is the recipient or the consignee of the cargo which usually pays the customs taxes in the country of arrival.
However, the competitive pressures of the market or issues related to the ownership of the goods can justify, in certain circumstances, that the foreign shipper bears import duties and taxes in France. In such a case, we talk of a shipment or a sale under DDP terms (Delivery Duty Paid).
A. What is a DDP shipment to France ?
DDP or Delivered Duty Paid refers to shipments where the shipper (the overseas company not established in France) delivers goods sourced from a non-EU country to their final destination in France, but already cleared for importation.
The overseas company bears all landed costs, including transportation charges, import duty and taxes levied on the goods by the French Customs Authorities.
B. How import duty and taxes are charged in France ?
When sending a Delivered Duty Paid (DDP) shipment to France, an overseas company handles the shipment to a forwarding agent like FedEx, DHL or UPS, to name but a few. The latter arranges customs clearance in France in the name and on the behalf of the shipper.
The freight forwarder or carrier pays in advance the duty and taxes to French Customs, and returns an invoice corresponding to the taxes prepaid to the shipper.
C. Can my company reclaim import VAT for DDP shipment to France ?
YES! A VAT refund reciprocity agreement is not required.
D. Which countries have a VAT refund reciprocity agreement with France ?
Every overseas company, without any restriction related to the country of incorporation, is eligible to recover import VAT in France.
E. What are the requirements for import VAT refund in France ?
All the following conditions have to be fulfilled:
- The overseas company (the shipper) should be the Importer of Record (IOR) or the “recipient” on the Customs document issued in France. To read more on the IOR requirements, please go on the page Prepare your shipment.
- The overseas business (the shipper) applying for import VAT refund in France is a taxable person in the country of incorporation. A Tax certificate proving this status will be required.
- The customer in France is a taxable business registered for VAT (e.g. retailers, distributors, industrial companies, etc.). If your clients are private consumers, you are not eligible for import tax refund under the present procedure. Please contact us to set up an alternative solution.
- The amount of VAT for which a refund claim will be introduced represents at least 200 EUR for non-EU companies and 400 EUR for EU based companies.
- The VAT refund claim is submitted to French Tax Authorities no later than June 30th of the year following the year of importation (for non-EU companies) or September 30th of the year following the year of importation (for EU based companies).
F. Can I reclaim French import VAT for any kind of DDP shipment ?
Even if your company is not selling goods imported into France (i.e. there is no transfer of ownership immediately after the customs clearance), you can still recover import VAT if some legal conditions are fulfilled. You will find below few examples of import flows for which you will be able to reclaim French VAT :
- Networking equipment shipped from a non-EU country to a data center in France (colocation service);
- Goods imported into France for international trade shows or exhibitions (i.e: Temporary Importation);
- Goods under warranty imported for repair or replacement and goods imported for further processing;
- Goods brought into France to be rented under a hire or leasing contract (e.g: Equipment Lease Agreement);
- Goods shipped by foreign e-retailers to Amazon’s warehouses in France (for subsequent sales across the EU);
- Non-EU goods shipped to a French company under a consignment sale agreement (consignment/call-off stock).
G. How long does it take before I can receive VAT refund in France ?
In France, the Tax authorities investigate on each case and make a decision within 1 to 4 months after having received all the required documents. We remind you that this is an average timeline given for information purposes only.
H. Further help or advice ?
The content published here above is based on information timely as of 1 January 2020, unless otherwise indicated. Amendments to the tax laws in various EU countries covered here could have been passed recently. Therefore, readers should contact Corintax Consulting for further insights.