Understanding VAT Self-Assessment on Imports in France

Since 2022, companies importing goods into France have faced a significant change in how VAT is managed. The VAT due on imports must now be self-assessed on the VAT return (ATVAI) of the company stated as the liable person on the customs declaration. This shift implies that the monthly import amounts are pre-filled in the VAT return  by the tax authorities based on data from customs. Consequently, any errors or omissions in customs declarations now lead to tax risks rather than customs risks.

Two Types of Tax Risks

Risks Related to the Definition of the Liable Person

In customs declarations, the importer for customs purposes is not necessarily the same as the liable person for VAT purposes. The liable person for import VAT is the entity indicated in Box 44 with its French VAT number.

💡 Important Note: Only the legally liable person can deduct the self-assessed VAT. If the customs declaration does not correctly state the legally liable person, the deduction of the self-assessed VAT can be challenged. This can result in late payment interest (0.2% per month) and potential tax penalties.

Risks Related to the Import VAT Taxable Base

The taxable base for import VAT is the customs value. If there are any later changes in the customs value, these must be adjusted in the VAT return. This also applies in the event of a customs audit.

The pre-filled amount in the VAT return might not include all imports, such as those processed through a centralised clearance procedure. These transactions must be manually included in the VAT return.

⚠️ Consequences: Failure to include all imports can result in a 5% penalty on the omitted VAT amount.

💡 Important Note: The company’s financial/accounting department must be informed promptly of any changes in the customs value to ensure adjustments are made in the VAT returns.

Discrepancies Between Accounts and VAT Returns

The prices on supplier invoices necessarily differ from the pre-filled amounts in the VAT returns which are based on the customs value.

In other situations, such discrepancies can also appear, notably in case of :

• Imports in the name of a French company where the foreign company does not hold a VAT number (Incoterm DDP).
• Transactions without a commercial invoice, such as stock transfers, leased goods, or goods imported for repair.

Understanding these risks and ensuring accurate customs declarations are crucial for a secured VAT compliance and avoiding penalties. Companies must stay vigilant and ensure their financial departments are well-informed to manage these changes effectively.