DELIVERY OF GOODS IN FRANCE WITH INSTALLATION OR ASSEMBLY
The installation or assembly of movable goods in France can be carried out with or without a running trial. The fact that the goods installed may be incorporated to the land does not necessarily mean that the transaction will fall within the concept of "construction works".
1- Goods introduced into France from another EU country
When a company established in a country of the European Union sends to France (from its country of incorporation or from another EU country) goods to be assembled or installed in the premises of a VAT registered client in France, the introduction of these goods in the country is not considered as being a taxable intra-Community acquisition.
Thus, the buyer located in France will have to:
For the part related to VAT:pursuant to article 283-1 of the French General Tax Code (FGTC), self-account VAT under the national reverse charge mechanism (use box 3B of the French VAT return)
For the statistical part: to report the transaction on the INTRASTAT statement (arrival flows) to be submitted to the French Customs on the month following the date of delivery.
The seller established within the European Union will not be required to register for VAT in France.
A German company sends in France a machine in form of multiple spare parts. This company bears the costs for the assembly of the machine upon its arrival in France. Only the functional product will be made available to a French customer (registered for VAT) at the end of the processing.
The client identified for VAT in France is liable for the payment of the tax related to the sale of the assembled machine and should self-account VAT under the reverse charge procedure. It will also have to report the transaction on the INTRASTAT statement (arrivals) of the corresponding month.
The German company (supplier) is exempt from all fiscal and statistical obligations in France and will not have to be registered for French VAT.
2- Goods introduced into France from a country outside the EU
When a company established in a country outside the European Union imports into France goods intended to be assembled or installed in the premises of a VAT registered client, it will be required to pay import VAT levied by the Customs Authorities on the DDP value of the goods. Let’s remind that holding a French EORI number is a prerequisite for a foreign company to act as importer of record in France and being eligible to reclaim afterward import VAT. But the requirement of an EORI number in France will not be necessary if the foreign importer already has such a number in another EU country.
The client identified for VAT purposes in France will self-account (under the reverse charge procedure) the VAT due on the subsequent domestic sale performed after installation or assembly.
A Japanese company imports into France a CNC machine tool to be delivered, after installation, to another company registered for VAT purposes in France.
The Japanese company supports the customs taxes levied on the French borders and appearing on a corresponding invoice received from its freight forwarder.
The amount corresponding to import VAT may however be recovered by the Japanese company, provided that the latter duly appoints a fiscal representative established in France who will handle the French VAT refund claim.
In case where the Japanese supplier has to pay additional VAT on local purchases in France, like for example the acquisition of some spare parts to be incorporated into the machine, the recovery of VAT on these expenses is also possible.
Insofar as the final customer of the goods installed or assembled in France will self-account VAT on the transaction (reverse charge mechanism), the foreign supplier is not authorized to charge French VAT on its supply. The sales invoice will be issued with a VAT rate at 0%.
For further information, please send your inquiry to vat@N0SPAM corintax.com or call +33 2 61 53 65 44.