Important changes to French VAT law from January 2022

From 1st January 2022 there are some significant changes to French VAT law. The management and collection of import VAT will be transferred from French Customs to the French Tax Authority.

Postponed VAT Accounting (PVA) will become compulsory for all VAT registered companies importing goods to France from non-EU countries, without the need for prior authorisation, and will see the declaration and payment of import VAT automatically made directly in the French VAT return declaration.

The new regulation follows the introduction of PVA in 2017 and is key to competitiveness for companies in France. The changes are hoped to provide benefits for business by removing upfront payment of costly import VAT, improving cash flow.

To benefit from the new system, companies must obtain a valid French VAT number and file VAT declarations.

Sources:

• BIFA.org
• douane.gouv.fr (EN)
• douane.gouv.fr (FR)