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VAT/TVA

Posted by Lineker-190356 - Created: 14 years ago
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can anyone tell me the official legit answer to a VAT/TVA scenario:

UK registered company is supplying products in France. They wish to invoice in euros- whjich VAT rate applies. Can the French purchasing company claim back the TVA/VAT?

Can the UK company apply for a French TVA number??

As I understand it is perfectly legal for a UK company to trade in French as long as the company is not based there ( ie no offices/factory or sales staff not permanently employed there). Once the Uk company sets up offices etc in France they will need to set up a French co naturally paying French social charges etc?

Any advice greately appreciated.....

 

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3 replies (Showing replies: 1 to 3)

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Posted by mike-179830 - 14 years ago

It's a bit (well, a lot) more complicated than that.

First the TVA/VAT matter, which is quite easy; simply put, a VAT-registered UK company can bill a TVA-registered French company the ex-TVA price as long as they have the French company's TVA number. If the customer is not TVA-registered than VAT must be charged at the UK rate. As Dolce Vita says, it's all at http://www.hmce.gov.uk/.

The whole business of UK-registered companies trading in or with France is much messier. At the risk of over-simplifying (a caveat which must be applied to everything that follows!), a fairly good rule of thumb is that if the company is operating in France it should have a French-registered presence; if it is simply trading with France then it can operate entirely from its UK base.

The nature of the operations in France affect the nature of the French presence. The most simple and straightforward is the Liaison Office, which can be used for (say) marketing, but not for trading. The next level up is the Branch Office (succursale) which formally registers the UK company to trade in France (RCS number, TVA number, SIRET and so on).

An alternative to a succursale is to have a subsidiary, which is an actual French compnay (typically a SARL or an SA) that is owned wholly or mainly be the UK company. This adds another level of limited liability for shareholders (as the subidiary's liability is limited to its own capital rather than that of the parent company) but also another level of complexity.

It's one of those areas where you really need to see a specialist or two. However, my experience is that if you see two specialists you get at least three (very different) opinions.

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Mike

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Posted by Lineker-190356 - 14 years ago

Many thanks for the info!!

 

Most helpful

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Posted by Dolce Vita-191247 - 14 years ago

As far as I know, a UK registered company supplying products/services in France, must invoice without VAT (ECC cross-country trade regulations! see also http://www.hmce.gov.uk/) and the purchasing company must be TVA registered in France. You can invoice in any currency you like, however, you will need to convert all funds into British Pounds when you do your quarterly VAT return in the UK. You will also have to name the purchasing company including their French TVA number when doing your VAT return in the UK . The UK VAT Office will check correctness of the purchasing company’s TVA registration with the French authorities. This is to make sure both of you are properly VAT registered. If the purchasing entity is not TVA registered in France, other rules may apply which you should check with your local VAT Office in the UK. They are usually very helpful.

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Can a UK company apply for a French TVA number? I suppose for that you will need to establish a subsidiary office in France, meaning a proper French company which is paying all taxes here in France (you may also find info on that on http://www.hmce.gov.uk/).