France: Threshold for VAT distance sales regime decreased to €35,000

February � 2016

1

Tax alert – January 1, 2016: Distance sales into France threshold decreased to 35 000 €

French inbound distance

sales regulations

Article 258 B of the French Tax

Code (hereinafter "FTC") deems

the place of delivery of goods to be

in France, and thus subject to

French VAT, where the following

cumulative conditions are satisfied:

1. The goods (other than new

means of transportation,

alcohol, alcoholic beverages,

mineral oils, and manufactured

tobacco) are sent or transported

into France from another EU

Member State by or for the

seller to a person benefiting

from a derogatory regime

("PBRD" under article 256 bis-I-

2°, FTC) or a person not subject

to VAT (e.g. an individual).

1. 2.

2. The amount of these

deliveries carried out by the

seller into France has exceeded

during the current year at the

moment of the delivery, or

during the prior year, the

inbound French distance sales

threshold (excluding VAT) as

adopted by France.

French cut-off threshold

decreased as from

January 1, 2016

Since January 1, 2016, due to a

change in the law enacted by

Article 9 of the French Finance

Law for 2016 a new threshold

applies. Formerly the cut-off

threshold at which a VAT taxable

seller needed to register for VAT

in France and charge French VAT

on distance sales inbound into

France was 100 000 € (excluding

VAT). With the newly enacted

modification, the threshold, which

when crossed triggers VAT

taxation in France, has now gone

down to 35 000 € (excluding VAT).

As a reminder, the threshold

condition does not apply when the

seller opts, in its Member State of

establishment, to deem France the

place of delivery.

Concretely, the decreased

inbound distance sales

threshold means that French

VAT may apply on your distance

sales in France and you may

have accompanying declarative

obligations while in previous

years you did not.

We are at your disposal to assist

you in VAT registering in France,

complying with declarative

obligations, and for any

additional information with

respect to your business

in France.

You may need to VAT register in France: don't delay!

If you carry out distance sales into France, as fromJanuary 1, 2016 the threshold at which you are subject to French VAT has decreased from 100 000 €excluding VAT to 35 000 €excluding VAT.

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French member of Grant Thornton International Ltd.

N.B.: This memorandum is of a general nature and no decisions should be taken without further advice. GT Société d’Avocats shall not accept any legal liability relating to the consequences of any decision or any action taken as a result of the information above. You are encouraged to seek professional advice. We would be happy to discuss the application of any of these changes to your particular situation.

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Elvire Tardivon-LorizonLawyer – Tax Partner T: +33 (0)1 53 42 61 61E: [email protected]

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