The French VAT authorities released their VAT refund application rules for UK businesses. The below is a guideline to French VAT refund submissions for UK businesses that is dependent on the Brexit outcome.
Rules for submitting VAT refund applications to France via the EU VAT refund procedure
Your business may have already submitted a French VAT refund claim through the British portal under the electronic VAT refund procedure for EU Businesses (Council Directive 2008/9/EC).
Depending on the state of EU negotiations, Brexit could be effective on October 31, 2019.
Rules in case of “No Deal Brexit”
If no agreement on the withdrawal of the United Kingdom from the EU was to be reached before October 31, 2019, the French VAT refund procedure for British businesses will change. Shall a No-Deal Brexit be enforced, the British portal will in fact not be able to send French VAT refund claims from November 1, 2019.
What does this mean for 2019 Expenses in France?
Shall you intend to submit a French VAT refund application for 2019 expenses on the British portal, you will be required to do so no later than October 31, 2019 and preferably, before October 15, 2019. Subsequently, especially for end-of-year expenses, applications will have to be submitted directly to the French VAT Repayment Unit for Foreign Businesses (SR-TVA) of the Directorate for Non-Resident Tax (DINR) according to the rules laid down in Council Directive 86/560/EEC (paper form before June 30 of the following year).
In conclusion, should there be a no deal Brexit outcome, from November 1, UK businesses will need to submit physical, original invoices to the French VAT authorities to receive refunds.
Shall a postponement of the withdrawal date be decided, the current procedure will remain unchanged.
How Does No Deal Brexit Affect French VAT Refunds?
It’s important to note the following changes that will affect the success of any refund requests made into France.
- In the event of a no Brexit deal, UK business’s claims into France will be paper-based.
- Original invoices will be needed for a successful refund.
- Invoice data will no longer be acceptable for a successful refund.
- While a digital VAT recovery platform can be used for a VAT potential analysis, in the case of making a claim, a digital platform will not aid in the physical submission of claims to the French VAT authority.
In conclusion, it’s important to ensure that your VAT reclaim agent is providing a refund solution that can cater to paper-based claims. If the refund solution is purely digital and data-driven while the process becomes paper-based, your business is at risk of losing out on French refunds.
How Can VAT IT Help?
VAT IT has taken control measures to deal with any possible changes in the refund process due to Brexit. With regards to a situation where original invoices are required for VAT refunds, VAT IT already has the infrastructure and manpower in place to process paper-based claims. Moreover, we can assist companies that may have a scan-and-destroy policy by attaining the original invoices directly from suppliers. Consequently, we have a dedicated reissues team that focuses solely on this task.
In short, we are completely dedicated to ensuring that our clients continue to receive the highest values in refunds from all EU states no matter the Brexit outcome.
For more information, visit https://brexit.gouv.fr/sites/brexit/accueil.html