Your VAT refund 13th Directive

VAT (value added tax) is an indirect tax that applies to the consumption of goods and services in the European Union (EU). Foreign companies that incur expenses in the course of their business in France but do not carry out taxable transactions there may be faced with the challenge of reimbursing the VAT paid. When established outside the European Union, companies must appoint a fiscal representative such as FISCALEAD.

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Understanding the 13th Directive: European legal framework and implications

The 13th Directive (EEC Directive) is a legislative text that aims to harmonise the VAT refund process for foreign businesses not established within the EU. Refunds may not be granted on terms more favourable than those applied to taxable persons in the European Union. However, it leaves Member States free to :

  • make VAT refunds conditional on third countries granting comparable advantages in the field of turnover taxes.
  • provide for the exclusion of certain expenses or make the refund subject to additional conditions.
  • require the appointment of a tax representative.
  • impose such obligations on the claimant as are necessary to assess the merits of the claim and to prevent fraud, including proof that he is carrying out an economic activity.
  • determine the procedures for submitting the application, including the deadlines, the period to which the application must relate the minimum amounts for which reimbursement may be requested, the terms and deadlines for reimbursement,
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French legal framework

In France, this directive is transposed in Articles 242-0 Z quater to 242-0 Z decies of Annex II of the General Tax Code.

The French legal framework

Taxable persons established outside the European Union may obtain a refund of the VAT regularly invoiced to them if,

  • during the quarter or year to which the refund application relates,
  • they did not have a place of business or permanent establishment in France,
  • and have not supplied goods or services in France during the same period.

These conditions must be met during the refund period.

In principle, 13th Directive VAT refunds can only be granted to companies established in a country or territory which grants comparable advantages in respect of turnover taxes to taxable persons established in France, and which appears on a list set by an order of the Minister responsible for the budget.

Note: to date, no country or territory appears on this list.

How to apply for a VAT refund

To claim a VAT refund in France, non-EU foreign companies must first appoint a tax representative accredited by the French tax authorities, such as FISCALEAD. This representative will prepare the application file on behalf of the company.

The non-EU company will then need to provide several documents, such as original invoices and a certificate of VAT liability in its country of origin.

Annual claims must be submitted by June 30 of the calendar year following the year in which the tax was paid.

Quarterly claims may be submitted at any time before the aforementioned June 30 N+1 deadline.

This means that a maximum of 5 claims can be made in any one year, 4 quarterly and one annual.

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What is the average processing time for a French VAT refund claim?

Processing can take several months. A request for additional information is interruptive. After 6 months of processing, the company may be entitled to late payment interest from the tax authorities. In addition to the quality of the applicant (see above), the French tax authorities will pay particular attention to :

The expenditure (goods or services) for which the VAT refund is requested must have been incurred for the purposes of the following operations:

  • operations whose place of taxation is abroad, but which would give rise to a right of deduction if their place of taxation were in France;
  • operations which, although located in France, do not entitle the taxable person to a refund under specific provisions (please contact us).

The tax that can be reimbursed is, in particular, the tax payable by the supplier of the goods and services or by the importer. The tax invoiced must, of course, be well-founded.

In addition, it must be ensured that neither the expenses incurred, nor the transactions for which they were incurred, are covered by the exclusions and limitations of the right to refund.

These include :

  • vehicles or equipment designed for transporting people or for mixed use, and related expenses;
  • expenditure on petrol, jet fuel, diesel and superethanol E 85 in particular;
  • accommodation expenses incurred for the company’s managers and employees.
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Entrusting us with your VAT refund claims couldn’t be simpler or more secure!

Your FISCALEAD refund file

01

Confidence and predictability: a clear budget billed for success

After discussing your status as a claimant, the nature of the expenses subject to VAT and the transactions for which they were incurred, we estimate the chances of a successful refund. Our fees will be invoiced upon validation of the refund only.

02

Collecting administrative documents

In order to appoint us as your fiscal representative, a mandate must be completed and sent to the French tax authorities. We will collect and check all the administrative documents required, such as an extract from the commercial register or similar, your company’s articles of association, proof of registration for sales tax in your country, and of course all the original invoices for which a refund is requested.

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From our analysis of the file to submission of the claim, our follow-up will ensure your success!

We study each item of evidence in terms of both form and content. We classify each expense to arrive at an amount that can be claimed from the authorities. Our practice is to systematically accompany the claim with an accompanying letter clearly explaining the operations in question and their context. In practice, the first claim for refund is often checked.

Get professional support

The majority of our cases come from direct contacts, but we also work with reputable law firms. We handle all types of cases, in all sectors. It’s true that on sensitive cases, either because of the sector of activity or because of the technical nature of the case, choosing FISCALEAD is particularly appropriate. By way of illustration, here are just a few examples of our successful projects:

  • Purchase of aircraft for export to a third country;
  • Complex” transactions where the distinction between goods and services is blurred;
  • Intra-group transactions and economic justification

We do our utmost to ensure that your rights to reimbursement are exercised in a secure manner. In fact, we only file claims for which we are convinced of their technical and regulatory validity.

Our convictions forge our successes, which are first and foremost yours.

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Although we are extremely attached to the formalism of refund applications and their security, we remain agile and responsive. With us, even the simplest, largest and/or most technical VAT refund applications are a success!

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FISCALEAD

Founded by Marcie REYNO-DALLE and Alexandra LOUYOT, FISCALEAD provides operational assistance in indirect taxation: Customs, Excise and VAT. With many years’ experiences in both big 4 law firms and in-house, our team is experienced in a wide range of international business models, industries, and supply chains.

Committed to listening to your operational needs, we put our technical expertise at the service of your logistical, IT and HR realities.

Whether you call on our tax reporting or operational advisory services, our obsession is to ensure that indirect taxation is no longer a barrier for your business but opens up new opportunities for you.

Our added value? In an increasingly globalised and digitalised world, at FISCALEAD expertise is a priority, and technology a necessity – without ever being dissociated. Come and meet us!

Skills

We work with a number of firms that we have partnered with

Knowledge and expertise

We monitor European tax and customs matters for our customers and run technical and practical workshops, webinars and training courses.

Experience

Over 15 years' experience in indirect tax management: Customs, Excise, VAT.

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