France relaxes conditions for Import VAT Postponed Accounting

28 February 2020

From January 2021, France will drop all requirements on businesses who are entitled to use the Import Value-Added Tax (VAT) Postponed Accounting regime in the country. 

This regime allows VAT registered businesses to apply to the French tax authorities for authorisation to use a reverse charge at import. Once accepted, it then removes the requirement to pay import VAT when goods are cleared into France, and instead the VAT is deferred to the importing businesses’ VAT return.

Currently, the requirements to use the Import VAT Postponed Accounting regime are different for European Union (EU) and non-EU businesses, and can be seen below:

EU established companies who have:

• completed at least four import operations in the EU Customs Union in the previous 12 months;
• the ability to be able to demonstrate that they have a management/control system for their customs and tax entries;
• had no tax or customs infringements in the past 12 months; and 
• had good financial standing in past 12 months.

Companies not established in the EU:

• have to request the application via their customs representative (normally their shipper) who are established in the EU. The customs representative should also have authorised economic operator (AEO) status, which means they have met certain criteria set out by EU customs authorities to get preferential treatment and speed up their clearances across the EU.

By dropping these requirements, the French customs authorities hope to allow more businesses to take advantage of this simplification and save on shipping costs.