France says “Au Revoir” to simplified tax representation- how non-EU importers must prepare

November 5, 2025 EU VAT Update

For decades, France allowed non-EU companies to import goods under Customs Procedure 42 (Regime 42) using a simplified tax representation model.

This regime enabled businesses to avoid paying French import VAT at the border by delegating VAT obligations to a local representative. The goods were then shipped to another EU country, where VAT was accounted for via the reverse charge mechanism.

This system was particularly beneficial for non-EU businesses, offering cash flow advantages and streamlined logistics.

Previously, non-EU companies could appoint a one-off fiscal representative who used their own VAT number to facilitate VAT-exempt imports. However, rising concerns about VAT fraud, coupled with the EU’s push for greater transparency and harmonization, have prompted the repeal of this regime.

Following our May 2025 article on this topic, the French tax authorities, responding to industry concerns, granted an exceptional extension of the one-off fiscal representation scheme on May 14, 2025. The scheme, which had been due to come into effect in January 2025, will now remain in place until December 31, 2025, giving businesses additional time to adjust to the new rules.

What Will Change in 2026

Effective from 01st January 2026, France will abolish the simplified tax representation regime, meaning:

  • Imports under regime 42 can no longer use the VAT number of a simplified representative.
  • Non-EU companies must VAT register in France in their own name.
  • Alternatively, transactions must be handled via an accredited fiscal representative.

Impacts for Businesses:

The 2026 reform will have several important effects:

  • Potential border delays: Imports could be held up if VAT registration isn’t in place.
  • End of VAT deferral: Non-compliant businesses will no longer benefit from Regime 42.
  • Higher administrative requirements: Companies will need to handle VAT filings and compliance directly.
  • Supply-chain adjustments: Some may explore alternative EU routes, such as via the Netherlands or Belgium, to optimise VAT treatment.

 Next Steps for Non-EU Companies

  • Register for French VAT: Ensure your company has a French VAT number and appoint a fiscal representative.
  • Review VAT handling on imports.
  • Strengthen compliance: Keep customs documentation and VAT reporting accurate to avoid penalties.
  • Review your supply chain: Update contracts, incoterms, and logistics processes to reflect the new rules.

Conclusion:

The abolishment of France’s simplified tax representation regime marks a significant shift in EU VAT compliance for non-EU businesses.

If you wish to discuss any VAT related issues with respect to this change, please do not hesitate to contact Meridian Global VAT Services and we will be happy to assist you.

Archives