As of 1 January 2022, the reverser charge system is being effective and the change is pursuant to Law n° 2019-1479 of 28/12/2019, Article 181. A significant change related to this transfer is that the reverse charge of import VAT will be applied via the importer's French VAT returns, which will be directly pre-filled by the tax authorities for these transactions.
This is a change that businesses should be aware of and take note of when importing into France. The reverse charge system means that businesses can account for the import VAT on their French VAT return, rather than paying it at the time of importation. This is a significant change and one that can have a positive impact on businesses' cash flow. Businesses should ensure that they are aware of the change and take steps to ensure that their import VAT returns are correctly filed. This is a change that can have a positive impact on businesses if they are prepared for it.
It's also a game changer as a huge cash-flow benefit will be seen by removing the requirement to outlay cash on import VAT at the border. Previously, businesses would have to pay import VAT at the border, which could often be a significant amount of money. Under the new system, businesses will no longer have to pay this tax, as it will be charged via their French VAT return. This will save businesses a lot of money, as they will no longer need to outlay cash on import VAT.
If you're doing business in France, it's important to be aware of these changes to import VAT. Make sure you understand how the new system works, and how it will impact your business. By doing so, you can ensure that you're prepared for the changes, and that you don't end up out of pocket. A taxable person without a valid French VAT number will not be able to use the self-charge system for import VAT.
If you have any questions about this change or how it may affect your business, please do not hesitate to contact us. Global Trade Business can help you ensure that your import VAT return is correctly filed and help you take advantage of the positive impact on your business.
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