What is French VAT? French VAT Review

Registration Scope

1. Using a local warehouse in France

2. Exceeding the remote quota

Remote sales in France are 35,000 euros. If the amount exceeds this, the seller must register for French VAT and pay a French VAT rate of 20%. The remote sales mentioned here include sales from Amazon, eBay, other sales platforms, and other sales channels using the same French VAT number!

Registration Document Requirements

Chinese companies: Business license (three certificates in one);

Hong Kong company: Certificate of Registration, Business Registration Certificate, Incorporation Form or Annual Return;

US company: Certificate of registration, IRS 6166 or EIN (Employer Identification Number) tax certificate, Certificate of Status, Article of Association, Statement of Information;

The full name of the legal representative who will sign the VAT application, a copy of their passport (if it is an ID card, please provide a translated copy), and a proof of address (this can be a utility bill with the name of the person in charge, a mortgage document, a rental agreement, a birth certificate, etc. If it is in Chinese, it needs to be translated into English).

Note: The three-in-one business license needs to be translated into English and stamped with the translation company's seal to prove that the English document is consistent with the original; when the three-in-one business license of a domestic enterprise is translated into an English document, the English company name must be consistent with the company registration name in the Amazon or eBay store backend.

2. Form/Signature

The POA France Non-EU Clients tax agent authorization document needs to be printed, signed and stamped. Two copies are required (please use company letterhead)

How to register for French VAT

1) Register with the Berlin Tax Office (takes about 14 days) and then the customer will enter the German monthly VAT declaration system

2) Submit Amazon's five market sales records (turnover), imports and exports, and the company's paid VAT invoices. The German accountant will help you apply for a monthly extension for submitting tax returns. If approved, all sales records (turnover) must be submitted before the 20th of each month.

3) German accountants declare monthly VAT and tax refunds and send them to clients by email, including the refund data and the amount to be delivered or refunded within the specified time.

4) If payment is required: the Chinese customer transfers the money to the German Finance Bureau.

Number of declarations

The French VAT tax rate is 20%, and it is declared once a month for a total of twelve times a year.

Tax rate calculation formula

Tariff = declared value * product tax rate

Import VAT = (declared value + first-leg freight + tariff) * tax rate

Sales VAT = {final sales / (1 + tax rate)} * tax rate

Actual VAT paid = Sales VAT – Import VAT

For example:

For example, if the cost of a certain mobile phone case you sell is 100 yuan, and Amazon sells it for 200 yuan, and you purchase 100 pieces and ship them to the UK, the total first-leg shipping cost is 800 yuan.

The total cost of the goods (declared value) is 10,000 yuan. During this quarter, you sold 90 units of this product.

How much VAT do you need to pay for your standard return (French tax rate: 20%) this quarter?

The calculation formula is as follows

Tariff = declared value * product tax rate = 10,000 * 7% (calculated based on 7% mobile phone case) = 700 yuan

Import VAT = (declared value + first-leg freight + tariff) * tax rate = (10,000 + 800 + 700) * 20% = 2,300 yuan

Sales VAT = {final sales / (1 + tax rate)} * tax rate = { (90 pieces * 200 yuan) / (1 + 20% )} * 20% = 3,000 yuan

※Since import VAT can be refunded, the VAT you actually need to pay in the current quarter is:

Actual tax paid = sales VAT – import VAT = 3,000 yuan – 2,300 yuan = 700 yuan

Late filing penalties

The penalty for late VAT declaration in France is 5%, and the penalty for late tax payment is 5%. If you are late in declaring and paying taxes, the total penalty is 10%.

Amazon

In January 2019, Amazon sent an email to sellers stating that they did not provide a valid VAT number for their business in France and therefore could not sell on Amazon.

legislation

In January 2016, France reduced the limit on long-distance sales from 100,000 euros to 35,000 euros.

In February 2018, Amazon announced on the 5th that it had reached a tax settlement agreement with the French government, ending a tax dispute of approximately 200 million euros (approximately 249 million US dollars) between the two parties.