Understanding France’s New Fiscal Representation Accreditation Requirement

France has recently implemented significant changes in its tax regulations, specifically in the area of VAT fiscal representation. This article explores the latest development in this area: the fiscal representation accreditation requirement, as outlined in Decree No. 2021-300 of March 18, 2021, Article 23.

What is Fiscal Representation?

Fiscal representation is a legally binding arrangement in which a non-EU company appoints a representative based in France to manage their VAT obligations on their behalf. This representative assumes responsibility for ensuring compliance with French VAT regulations. Additionally, it's essential to note that fiscal representatives share joint and several liability with the tax authorities for the debts of the foreign company.

For EU companies, the process is slightly different. They can either directly register for VAT purposes in France or appoint a fiscal agent to handle their VAT obligations on their behalf.

It's important to emphasize that not all non-EU-based companies must appoint a fiscal representative in France. Companies based in certain non-EU countries are also allowed to register directly for VAT purposes in France without appointing a fiscal representative. Some of these countries are Australia, UK, and Norway. You can find here the full list of countries not requiring fiscal representation in France.

The New Accreditation Requirement

The introduction of the new accreditation requirement adds an additional layer of oversight to this process. To represent a client for VAT purposes, the fiscal representative must obtain accreditation from the tax office. This accreditation is a prerequisite for all new VAT registrations.

Fiscal representation accreditation involves meeting specific criteria and complying with regulations set forth by French tax authorities. These criteria aim to promote transparency and accountability within fiscal representation arrangements and include:

1. Capacity Condition: The tax representative must demonstrate the presence of an administrative infrastructure, as well as sufficient human and material resources to effectively fulfill their representation duties.
2. Solvency Condition: The tax representative must exhibit financial solvency in relation to their obligations as a representative. Alternatively, they may establish a bank guarantee equivalent to a quarter of the annual VAT liabilities of the foreign company they represent.
3. Morality Condition: The tax representative must have a clean record, free from serious or repeated offenses against tax provisions.

The above criteria are described in Article 289A of the French Tax Code.

The implementation of the fiscal representation accreditation requirement in France marks a significant milestone. It highlights the importance of remaining well-informed about evolving tax regulations and partnering with reputable representatives to navigate the intricate landscape of VAT in France.