A Fiscal Representative may be required in France for businesses looking to register for VAT in France who carry out local activity by providing goods or services to French businesses or individuals. The local Fiscal representative in France will be responsible for for managing the queries and filing obligations of the non-resident trader. They are also be jointly and severally liable for the VAT due and due to the risk may require bank guarantee’s or deposits when representing a business within France.
France requires businesses who are not established within the European Union to appoint a fiscal rep for VAT purposes such as registration and filing. However, if a business is established in one of the non-eu countries which France has a tax mutual assistance agreement with, then this is not required. These businesses may register without a Fiscal Representative.
This list of countries that do not require a Fiscal Rep. currently includes Australia; India; Iceland; Japan; Mexico; New Zealand; Norway; South Korea; and South Africa.
However the following still require a Fiscal Representative in France: U.S.A., Canada, Switzerland and China.
It use to be a requirement that businesses in the EU would require a Fiscal Representative in the country(s) they are carrying out taxable transactions in. This was simplified by the EU VAT Directive 2006/65/EC which allows EU companies to register directly with the tax authorities.
There are however some exceptions and complications such as countries only issuing documentation in their local language and some countries which still require a local accountant to represent them in the country. A fiscal representative may still be required for various schemes involving import goods directly into the member state where your business in not established.
A large majority of EU member states have requirements for non-eu businesses to appoint a fiscal representative when they are carrying out taxable supplies within their country. This can be a complex and expensive process where bank guarantee’s and even deposits may be required to secure a fiscal representative. A different fiscal representative would generally need to be appointed in each member state which requires the obligation increasing tax compliance across the EU. Due to this requirement many non-eu companies choose to form their own company within the EU allowing them to directly register this the tax authorities in each state and avoiding this complication.
Within the EU there are a number of deferral schemes for Import VAT which can significantly help a businesses cashflow by delaying the import VAT and claiming it back within the local VAT return subsequently creating a zero effect. These deferment schemes require a local fiscal representative in the country of import and clearance in order to take advantage.
When clearing goods in an EU country, you will need to provide a VAT number for the clearance of goods along with your EORI number. This requires you to be VAT registered in the country or appoint a Fiscal Representative to use their VAT number. In other case whereas the importing business does not have an EU entity, they will be required to appoint a direct or indirect representative for managing the customs import declarations and paying the VAT & Duty.
When trading goods EU and non-EU traders of commodities (oil, gas, chemicals, pharmaceuticals etc.) can trade on a VAT exempt basis in bond if they appoint a local fiscal representative. Countries such as Belgium and the Netherlands operate special schemes for importers allowing businesses to reduce the VAT output.
VAT digital is here to help, our experience team located across Europe can help you register for VAT in member states where a fiscal representative is required using our large network of local accountants across Europe we can help carry out any VAT obligations within the European Union.
A fiscal representative is mainly required for businesses who have no base or physical presence within the European Union and for countries who do not have a mutual assistance agreement with the EU. This makes it easier for the relevant tax office to chase and claim VAT when it is either reported incorrectly or not paid entirely.
A bank guarantee is a special agreement between you, your bank and the fiscal representative which in failure of payment of your VAT bill the bank would guarantee the money to be paid to the fiscal representative if your business does not.
All of our packages include registration and VAT returns, plus other additional services
