French Tax representation of non-EU-companies

New Tax Obligations & VAT Opportunities

On July 12th 2023, The French Tax administration has transposed in its Official Tax Bulletin the Article 23 of the Decree n°2021-300 from 18/03/2021.

This publication and the related Tax Law confirm that Companies non-established in the EU must appoint a French Tax representative if they are undertaking in France :

1. Provision of VAT taxable supplies towards individuals or companies non-VAT registered in France

• Short term vehicle rentals put at disposal of recipients in France
• Long term vehicle rentals for individuals having their residence in France (specific rules apply for boats)
• Services linked to the immovable property located in France
• Intracommunity transport of goods with departure from France
• Other transport of goods & of passengers proportionally to the distance run in France
• Services linked to the above transport
• Cultural, sport, educational and similar services realised in France
• Sales of goods for their consumption in France (food & drinks, also on board of train, boat, etc.)
• Expertise & services linked to the movable goods located in France
• Intermediary services on goods located in France
• Distance sales of goods from other States towards individuals in France – OSS scheme (if global EU sales > 10.000 €)
• Distance sales of electronic services towards individuals in France (if the OSS scheme is also used for goods)
• Etc.

2. Importation of goods in France (due import VAT to be reverse-charged in the local VAT return)

3. Business operations requiring the submission of fiscal or statistic declarations

• Intracommunity acquisition of goods in France
• Intracommunity deliveries of stock from France towards other EU-countries
• Intracommunity deliveries of goods from France towards other EU-countries
• Exportation of goods from France towards non-EU countries
• For declaring other taxes : TGAP, BNA, Tax on phytopharmaceutical products

In all the above cases, the non-EU companies have to get VAT registered in France.

Except the OSS distance sales for E-Commerce, where the VAT registration can be made in any single EU-member state, but the French VAT will be still collected on all sales towards France.

Dispense of the Tax representative in France

In the following cases, the non-EU-companies can be dispensed of the obligation appointing the local Tax representative in France :

• Companies established in one of the 41 countries having put in place a mutual tax assistant instrument with France. The updated countries’ list can be checked here : https://www.legifrance.gouv.fr/loda/id/JORFTEXT000027655132/
• Companies making importations & intracommunity acquisitions of goods under VAT suspension’s regimes
• Companies making deliveries of gas, electricity, heating or cooling for which the VAT is due by the recipient

Modalities of the VAT registration

The VAT registration of non-EU-companies in France must be done electronically via https://formalites.entreprises.gouv.fr. The registration request must include all the mandatory accompanying documents. The non-EU companies can also mandate their future French Tax representative for accomplishing this VAT registration procedure.

Requirements towards the Tax Representative

The French Tax Representative must be  :

1. Established in France
2. VAT registered in France
3. Liable for all formalities due by the represented non-EU company
4. Liable for the payment of the VAT due in France by the represented non-EU company

Modalities of the appointment

The appointment must be done by the non-EU-company in written.

It’s conditioned by the formal acceptance of the designated Tax representative.

The appointment will remain in place until its denunciation by the non-EU-company or by its Tax representative who must prove having informed about it the represented company. It can be also revoked by the French Tax Authorities if the Tax representative is not accomplishing its legal obligations.

The non-appointment of the Tax representative has for consequence the application of penalties towards the recipient of the taxable services.

New : Acceptance of the Tax representation by the French Tax Authorities

The Tax Representative must submit a representation request for each new client.

The Accreditation of the French Tax representative is secured by the French Tax authorities which are checking in regard to each new represented non-EU-company :

1. The tax number of the Tax representative
2. The description of its business structure, of its technical & human resources
3. The extract of the criminal records proving the morality of the tax representative
4. The proof of the financial solvability or a bank guarantee covering the due VAT

Accounting obligations

1. The invoices can be issued either by the Tax representative or by the non-EU-company.

In both cases, the invoices must mention the identification both of the service provider (non-EU-company) and of its local Tax representative.

• The bookkeeping for all the French operations of the non-EU-company can be done either by the Tax representative or by the non-EU-company itself.

In the second case, the French Tax representative must still be able to provide to the French Tax Authorities all the requested bookkeeping elements in case of the Tax audit.

Punctual appointment of the Tax representative

The punctual appointment of the French Tax representative is foreseen for the non-EU-companies :

• making exportations from France or removing goods from a suspensive Customs regime
• importing VAT-free goods for their onwards intracommunity delivery

Dispense of VAT registration & VAT Recovery

Non-EU-businesses which are only providing services and supplies of goods towards companies VAT registered in France do not have any obligation of getting VAT registered in France.

These non-EU-companies can still need to appoint a Tax representative in France for recovering the French VAT supported on their Local Purchases (supplier invoices)  or on their Travels & Expenses (T&E) occurred in France.

The appointment of the Tax representative for VAT recovery purposes under the 13^th EU Directive is much easier, for both parties, as it also concerns businesses which are not realising any business operations in France.

The Deadline for claiming the VAT in France by non-EU-companies having no valid French VAT registration is fixed on June 30th of the year following the year of the expense.  (Example: June 30^th 2024 for the expenses from 2023)

The non-EU-companies which are also VAT registered in France can deduct the supported French VAT in their periodical VAT returns in France.