VAT registration rules
Under prior rules (Article 289 A of the French tax code), taxable persons not established in the EU and conducting taxable operations in France, for which they were liable for French VAT, had to appoint a VAT representative for French VAT registration purposes. The French VAT representative was responsible and liable for all VAT obligations of the taxable persons.
However, measures contained in recent tax legislation limit this liability.
Beginning 1 January 2013—pursuant to new Article 289 A I paragraph 2 of the French tax code—non-EU taxable persons established in a country having in force an agreement (treaty) with France that contains a mutual administrative assistance in tax matters provision no longer are required to appoint a VAT representative. Instead, these non-EU persons must themselves register for VAT with the French tax authorities (under the same procedures as followed by EU taxable persons).
A list of subject countries (those having treaties with France containing the appropriate mutual assistance clauses) will be further specified by a decree to be issued by the French government.
From a practical standpoint, an advisor can be appointed to deal with all the VAT obligations.
EC rejects France’s request for VAT reverse-charge on electronic telecommunication services, gas and electricity supplies
In February 2012, France requested that the European Commission authorize a regime (pursuant to provisions of the EC VAT Directive) so that VAT remittances in France would be due / remitted by the taxable supplier of the goods or services.
An “anti-fraud measure” was subsequently included in French legislation, pursuant to which (for invoices issued beginning 1 April 2012), a domestic reverse charge mechanism for domestic business-to-business supplies of telecommunication services and of gas and electricity not used by the purchaser was effective without first being authorized by the European Commission.
The European Commission, however, then examined France’s request and concluded in Communication COM (2012) 733 (6 December 2012) that conditions of the VAT Directive (relating to simplification of the procedures for taxable persons and/or the tax authorities for the prevention of tax evasion) had not been satisfied. Consequently, the European Commission rejected the domestic reverse charge mechanism for supplies of telecommunication services and of gas and electricity.
Tax professionals note that France may encounter practical problems with respect to this regime because it had already been implemented and applied from April to December 2012.