Editorial Team – [2026] 185 taxmann.com 849 (Article)
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1. France Clarified VAT Rules and Procedures for Distance Sales of Imported Goods Where the Trader Does Not Use IOSS
France has issued a clarification regarding the rules and procedures for declaring and paying value-added tax (VAT) on distance sales of imported goods made by a trader who is not registered under the VAT single window ‘Import One Stop Shop’ (IOSS). It also addresses the rules of liability applicable to import VAT on this same type of transaction.
The clarification concerns a merchant who sells goods from its website to individual consumers located in France or another Member State of the European Union (EU), where the goods are shipped directly to the customer from a non-EU country in which the supplier is established. The clarification explains how VAT must be declared and paid in such cases, as well as how liability for import VAT is determined depending on the customs procedures used when the goods enter the EU.
1.1 Place of Taxation of Distance Sales of Imported Goods
The place of taxation of distance sales of imported goods is the EU Member State where the goods are ultimately delivered to the customer. This rule applies uniformly to all such transactions and is not affected by provisions relating to territoriality of deliveries or the person liable for VAT on imports. As a result, when goods are delivered to a customer located in another EU Member State, the trader does not become liable for VAT in France under the distance sales of imported goods scheme (VAD-BI).
1.2 Rules Where Goods are Imported into the EU by France and Shipped to Another Member State
(a) Applicability based on intrinsic value of packages – Where goods are first imported into the EU in France and subsequently transported to customers located in another EU Member State, the applicable VAT rules depend on the intrinsic value of the goods determined on the basis of sale from the trader to the final consumer.
(b) Packages with intrinsic value less than €150 – When the intrinsic value of the consignment is less than €150, and the trader has not opted for the IOSS, the importation must take place in the EU Member State where the goods are delivered. In this case, the import is not deemed to occur in France, and no VAT arises in France on the import. If the goods are presented to a customs office in France, the trader must request the external transit customs procedure so that the goods can be released for free circulation in the Member State of destination.
(c) Packages with intrinsic value exceeding €150 – When the intrinsic value of the consignment exceeds €150, and the importation is carried out in France, the trader who makes the sale is liable for the import VAT. In this situation, no other person can be treated as liable for import VAT. The import VAT paid may be deducted under the ordinary conditions, provided that, it is incurred by the trader for purposes of the VAD-BI in another EU Member State.
1.3 Liability for Import VAT Where Goods are Imported into France and Delivered to Customers in France
Where goods are imported into France before being shipped to customers located in France, the transaction involves import VAT liability in France. The person liable for VAT on imports made in France is the end customer or the seller, depending on the case.
(a) When the customer/consignee is liable – Consignee is liable for import VAT when the following conditions are cumulatively met:
- The item is located in France at the time of arrival of the shipment or transport destined for the purchaser
- Sales are not facilitated by an electronic interface
- Seller has not opted for IOSS
- The tax base for the tax due on imports is equal to that which would be determined for distance selling if it were located in France.
In this case, the trader is not liable for import VAT and is not liable for VAT.
(b) When the seller becomes liable – Where the taxable base for imports differs from the taxable base determined for distance selling if it were located in France, the person liable for import VAT is the one making the sale. In this case, the place of sale of imported goods is located in France.
In this situation, the trader becomes liable for import VAT and for the VAT due in France on the distance selling transaction. The trader is required to complete the following formalities:
- Declare and collect the corresponding VAT
- Include VAT registration number in customs declaration requesting the release of the goods for free circulation
- Complete VAT return reporting
- Declaring the amount of VAD-BI on the sales tax return
The VAT collected on imports is deductible under the standard rules.
1.4 Application of Offset Provisions and Requirement to Appoint a Tax Representative
The provisions allowing for the offsetting of VAT amounts already paid to the Treasury against VAT amounts still due are applicable only after an audit initiated by the tax authorities. These provisions cannot be relied upon when completing the sales tax return under standard legal procedures.
Where the trader liable for VAT in France, or required to fulfil reporting obligations, is not established in the EU, the trader must appoint a tax representative. This requirement does not apply where the trader is established in a non-EU Member State with which France has a legal instrument relating to mutual assistance with a scope similar to that provided for by the relevant EU directives and regulations.
Source – Official Clarification
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