A Quick Glance at the Changes in the VAT Concessions in France
France has announced it will, from October 1, 2012, remove an administrative concession that allows foreign companies without a local establishment to register and collect Value Added Tax (VAT) due by its customers under the reverse charge mechanism. The move aligns French law with the EU tax laws.
France VAT Concessions: The Background
The current French VAT reverse charge allows VAT registered customers (whether established or non-established in the country) to pay VAT if the supplier of goods is not established in France.
However, as per the French administrative concession referred to as “répondant concession”, the supplier has the scope to collect the VAT owed by its customer and compensate the same against the VAT outstanding by the supplier. To benefit from this concession, the non-established seller is required to register for VAT and employ a delegate for tax declaration and payment purpose in France.
France VAT Concessions: The Implications
Foreign companies that are not established in France but supply goods or services to VAT-registered companies in France must now re-examine how they make their French VAT recovery and if they should retain their French VAT registration. In addition, they must notify the French tax authorities and conform to some formalities. Foreign companies may also need to re-work their invoicing processes and clearly state that VAT is due by the client or customer.
Keeping Up with the Change in Rules
For companies that are expanding, France offers a great entrepreneurial economy. It has a large amount of foreign investment with the government having a huge influence over important areas of infrastructure. It always becomes a challenge to keep up with the ever-changing regulations and latest amendments in an international business expansion. It is prudent to partner with a business consultant that has the necessary expertise and knowledge to be up to date with matters concerning taxation, compliance etc.
To materialize your overseas expansion plans, it is advisable to look for a services provider with the international tax, compliance, and accounting expertise needed to reduce the risk and liabilities. The consultant will provide tremendous assistance on the overall operational, administrational and executive aspects of your business likeglobal transfer pricing, tax for expats, international financial accounting.
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