VAT?
Following the tax on production in 1958, VAT was generalized in France in 1968 and then adopted by the European Community - and by other states outside of the EC - on account of its positive qualities.
VAT is a tax affecting final consumption, but it must be collected throughout the chain of production and distribution according to two fundamental principles: its neutrality with respect to the number of passages that there are between the producer and the final consumer and strict equality of the total amount of tax and its rate in the final price of the goods.
Refunds initiated by France in 1973 and unified by the 8th and 13th EU Directives stem from this last principle.
In 1992, the 6th Directive determined and unified territorial rules in the European Community, abolishing at the same time customs in the EU and instituting Intrastats for statistics regarding intra-community exchanges.
This first supposedly «transitory» period which should have been followed by a definitive «country of origin VAT» scheme, appears to need to be given up due to difficulties in harmonizing the VAT rates quicky replaced by the VAT single window scheme.
We can even talk of a new orientation of the European Union towards a «country of arrival» scheme (VAT of the country where the purchaser is established).
France confirmed this trend with Art 94 of the law dated 12/30/2005, deciding that the purchaser VAT identified in France is VAT liable for all transactions made with companies not established in France.
Nevertheless, a foreign company can be considered as a French supplier and can invoice with VAT, after appointing a tax agent or an authorized fiscal guarantor who will take charge of all obligations regarding customs and intercommunity declarations, declare and recover the tax.
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