Until 31 December 2021, import VAT was paid by businesses to the Directorate-General for Customs and Indirect Taxation (DGDDI) and then deducted by the importing business on its turnover declaration to the Directorate-General for Public Finances (DGFiP).
However, since 1 January 2017, it has been possible for traders to apply to the DGDDI, subject to conditions, for authorisation to reverse charge import VAT.
Since 1 January 2022, the reverse charge applies automatically and across the board to import flows to a trader liable for VAT in France (Article 181 of the 2020 Finance Act). VAT due on imports must therefore be declared, paid and deducted to the DGFiP (this competence has been transferred from the DGDDI by the Finance Act for 2021, the DGDDI still remaining competent to determine and control the taxable amount of VAT on imports).
In practice, traders must continue to file customs declarations for the purpose of clearing goods. The data collected by the customs services is automatically transferred to the VAT declarations that traders must (directly or via an agent or a tax representative) file with the DGFIP (the DGDDI will provide taxable persons with a dedicated space on the douane.gouv.fr website as of 14 February 2022 to enable traders to check the accuracy of these pre-filled data)
The reverse charge system offers advantages for taxable persons in terms of simplification thanks to the partial filling in of VAT returns but also in terms of cash flow. Indeed, the reverse charge allows taxable persons to collect but also to deduct import VAT on the same return (there is therefore no more cash advance to carry).
Operators who wish to benefit from the reverse charge mechanism must therefore apply to the tax authorities to obtain a French intra-Community VAT number.