Fiscal representation helps comply with administrative conformity requirements demanded when trading with foreign countries. In addition to certain taxes on very specific products, value-added tax (VAT) is declared differently depending on the country of import or export. A great deal of trade situations are subject to VAT, in many foreign countries. Hence the need for companies to find solutions to their administrative problems by calling upon firms and their services.
A fiscal representative serves as an intermediary between tax authorities and foreign natural or legal persons. They make sure all declarations made by foreign clients are correct. The fiscal representative is entrusted with managing administrative and tax-related formalities. They are a real necessity, even for companies trading within the European Union.
Specificities of fiscal representation
Fiscal representatives advise logisticians, importers and exporters regarding applicable regulations during trade operations:
Information about zones for intra- and extra-Community flows;
Information about “distance” selling;
Information at the time of delivery when installation or assembly work is required;
In the case of consignment ;
In the case of foreign subcontracting operations prior to customer delivery;
In the case of real estate projects or capital gain;
In the case of purchase & resale in the same country.
Examples and practical applications
Fiscal representative’s roles
They issue invoices on behalf of the company they represent;
They analyse the flow of goods in order to estimate the annual thresholds for declarations following the exchange of goods (DEB – Intrastat). Some declarations are for import and others for export. The threshold of 460,000 euros is key;
They make all necessary declarations and tax payments, including VAT;
They manage declarations for exchanges (EC Sales List – ESL) or for the exchange of goods within the European Community;
They form a link between the company and local authorities in terms of administrative obligations in force in each country;
They provide useful information regarding the obligations to be met in terms of VAT for the goods exchanged.
The fiscal representative’s role does not stop at that!
They may also take care of your company’s VAT, ESL and Intrastat registration by contacting local administrations;
They request and use certain files necessary for making declarations;
They manage any financial issues caused by VAT, ESL and Intrastat balances, debit or credit - generated by pending operations;
They take care of sending in relevant dashboards;
They stay up to date with any news related to their field of operations and make sure you get the assistance you need.
French tax administrations and ask that foreign companies choose a fiscal representative working in France. In the eyes of the tax administration (for example), said fiscal representative becomes in charge of all declarations and tax payments to the involved administrations.
A company whose goods come into France to be transformed then delivered abroad must be registered for VAT on the French territory. This is the case whether the goods are exempt from VAT or not, and whether they concern an EU Member State or not. If they are outside the EU, a goods exchange declaration will need to be filled in by the firm. Lastly, a company established outside the EU, in a country that has not signed an administrative assistance convention, is obligated to hire a fiscal representative in France. A certain number of companies outside the EU are not obligated to resort to if they are already subjected to French VAT.
EEE agreement (I-A-1 § 30).
Article 50-0 Aa of appendix IV of the General Tax Code.