Fiscal representation in France
The fiscal representative is responsible for ensuring that the non-resident company complies with all French VAT rules and regulations, including the submission of VAT returns and payment of VAT, as well as representing the non-resident company in any tax-related matters or disputes.
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In general, a fiscal representative is required when a non-resident company has no permanent establishment or fixed place of business in France.
French VAT reverse charge
In France, the reverse charge mechanism applies to certain supplies of goods and services where the VAT liability shifts from the supplier to the customer. Under the reverse charge mechanism, the recipient of the goods or services is responsible for reporting and paying the VAT due to the French tax authorities, rather than the supplier.
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The reverse charge mechanism applies to various types of transactions in France, including:
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Intra-community acquisitions of goods: When a French VAT-registered business purchases goods from another EU country and imports them into France, the recipient is responsible for reporting and paying the VAT due on the transaction.
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Services provided by non-established businesses: When a non-established business provides services to a French VAT-registered business, the recipient is responsible for reporting and paying the VAT due on the transaction.
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Certain domestic transactions: The reverse charge mechanism may also apply to certain domestic transactions, such as the supply of goods subject to excise duty.
Frequency of French VAT returns
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Monthly VAT returns: Default for all VAT-registered entities, unless under a special scheme.
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Quarterly VAT returns: For businesses with annual VAT liability under €4,000.
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No VAT return: Certain industries report based on specific activities.
French VAT compliance
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VAT Registration: Businesses meeting the threshold for VAT registration must register with the French tax authorities to obtain a VAT number. This enables them to charge, collect, and remit VAT on their taxable supplies.
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VAT Rates and Invoicing: Businesses must correctly apply the appropriate VAT rates to their goods or services and issue valid VAT invoices to customers. Invoices should contain specific information required by French VAT regulations.
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VAT Reporting and Returns: Businesses are responsible for submitting regular VAT returns to the tax authorities, reporting their VAT liabilities and input tax credits. Returns must be filed within the prescribed deadlines and reflect accurate calculations.
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Intrastat Reporting: If a business exceeds the threshold for intra-EU trade, they may be required to submit regular Intrastat returns. Intrastat reports provide statistical information on the movement of goods between EU member states.
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Reverse Charge Mechanism: Businesses should understand and apply the reverse charge mechanism correctly in specific situations where the recipient is responsible for reporting and paying the VAT instead of the supplier.
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VAT Compliance Documentation: It is important to maintain proper records and documentation to support VAT transactions, including invoices, VAT certificates, and relevant business documents.
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Compliance with VAT Rules and Regulations: Businesses should stay updated with any changes or updates to French VAT legislation and ensure compliance with all applicable rules and regulations.