Modifications of VAT rules since September 1st 2006

Since January 1st 2002, France has abandoned the status of tax representative for taxable persons in the EU and replaced it with that of fiscal agent.

Since September 1st 2006 the reverse charge system has been generalized within the framework of reforms intended to counter tax evasion. The person liable for the VAT is no longer the supplier but, generally speaking, the buyer if he is VAT registered (and established) in France.  In this manner we can distinguish between the person VAT registered, taxable and/or liable:

• The person liable can be either the buyer if he’s VAT registered in France or the seller via a fiscal guarantor (formerly a tax representative or fiscal agent). The guarantor is fiscally responsible for operations invoiced with VAT by the supplier.  He is responsible both on the account of the buyer and that of the seller. A contract binding the 3 parties is signed and the client is freed (he no longer has to fill in Exchange of Goods declarations DEB/Intrastat either). The contract allows the supplier who is not established in France to act as before and charge to tax owed all the recoverable tax.
• The fiscal guarantor is a tax representative when the supplier is established outside the European Union, bearing in mind that a contract will always be signed between the buyer and the seller in order to release the latter from obligations and responsibilities related to VAT and Intrastat.

Companies not established in France, depending on whether they are VAT registered or not, still benefit from VAT refunds either in the normal framework of VAT declarations or in accordance with the 8th directive of the EU or in accordance with the 13th directive in the case of companies established outside the EU.

It will be useful to consult us at least in order to verify the advantages of being registered under the normal system (with a fiscal guarantor or a tax representative) as far as sales and deliveries of goods or services are concerned, as well as the remaining obligations concerning identification, refund applications, extra territorial operations and statistical Intrastat declarations.