VAT: tax representation of companies established outside the EU
Enterprises which are established outside the European Union and which carry out transactions falling within the scope of VAT (VAT on value added) in France mustdesignate a tax representative, pursuant to Article 289A of the CGI (General Tax Code).
The Official Bulletin of Public Finance (BOFIP) published on 5 October last (BOI-TVA-DECLA-20-30-40-10) details to companies how to apply the regulations. Indeed, this BOFIP deals with taxation and reporting and accounting obligations for companies subject to VAT not established in the EU carrying out transactions in the Community territory. It recalls CGI's core articles related to the operations concerned.
The taxable person not established in the EU may designate onlyonly one tax representativefor all the operations he carries out in France and will have to comply with the detailed arrangements for designation and operation in the official bulletin.
The tax representative shall also comply with his or her obligations, including the following:
- Accreditationby the Business Tax Service (detailed conditions of Article 242f of Annex II to the CGI in Article 242 novodecies of Annex II to the CGI),
- Reporting obligations :compliance with tax obligations relating to transactions carried out and payment of VAT, declaration of turnover, summary statement of customers,
- Accounting obligations :issue of invoices, keeping an account specific to the business of tax representative.
Only transactions exempt from VAT may be carried out without tax representation. This is the case for transactions falling within point I of Article 291: placing goods under suspensive arrangements such as customs warehouses, transit and other special suspensive arrangements.
With regard to transactions falling within point II.4 of Article 277a of the CGI :
- Operations following suspensive or special arrangements (special arrangements for customs warehouses, transit, temporary admission ...)
- Exempt transactions pursuant to Article 291(3) of the CGI (case of release for free circulation with intra-Community delivery)
The operator may designate a one-time tax representative: a taxable person established in France, accredited by the Foreign Business Tax Service (SIEE) of the Non-Resident Tax Directorate (DINR), who fulfils the reporting obligations relating to transactions. Several tax representatives may be appointed by the same taxable person established outside the EU.
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