New guidelines for non-EU exporters released

The French customs administration issued new guidelines on 3 March 2020 that amend the administration’s position regarding exports from France by non-EU companies. The new rules will become effective on 1 May 2020.

In May 2016, a “new” Union customs code entered into force in the European Union. One major change in this code is the impossibility for non-EU established companies to act as exporter of record. This change caused major difficulties to companies, in particular regarding the justification of the VAT exemption applied on sales for export (i.e. foreign companies remain exporter for VAT purposes but another company acts as exporter of record for Customs purposes).

In order to mitigate the difficulties encountered by companies facing the changes, transitional measures were set up.

In this context, the French customs administration issued guidelines with a transition period during which a non-EU established company could continue to act as the exporter of record for Customs purposes (reported in box 2 of a single administrative document (SAD or customs declaration)) if it has appointed an indirect customs representative (SAD, box 14, code 3).

The transition period was supposed to start on 1 May 2016 and to end on 31 December 2020.

However, the European Union has amended the definition of exporter to fix certain difficulties encountered by non-established companies (EU regulation 2018/1063).

Following this change, European Commission has updated its guidelines in July 2019. Under the new European guidelines, the transitional measures were not including any-more the exporter of record (no justification regarding this change was provided, how-ever we assume that the Commission has considered that the new definition rendered transitional measures unnecessary).

Following those changes, the French customs administration made the decision to publish new guidelines, shortening the transition period set up in the previous guidelines.

As from 1 May 2020, a company that is not established in the EU no longer will be able to act as the exporter of record in France and thus be reported in box 2 of the SAD. The indirect customs representative will have to be reported both in boxes 2 and 14 of the SAD.

In practice:

  • Non-EU companies may continue to export goods from France provided that they have appointed an indirect customs representative (mandatory as from May 2016) that is reported in boxes 2 and 14 of the SAD
  • From a VAT perspective, the French VAT number of the VAT exporter must be re-ported in box 44 of the SAD to support that the transaction is VAT-exempt. In the case of chain transactions, it is important to identify the transaction qualifying for VAT exemption and to ensure that all supporting documentation is correctly pre-pared and retained by the VAT exporter. If the VAT exporter fails to provide the SAD disclosing its French VAT number in box 44 of the SAD (and referring to the correct transaction), the French tax administration could challenge the VAT exemption applied and reassess the company; and
  • The French customs administration recommends that the parties agree in writing as to which party will act as exporter of record. This will help to prove that this party “has the power to determine […] that the goods are to be taken out of that customs territory.”

The French customs administration postpones the effective date of the new customs definition of the exporter to October 1, 2020.

In view of the exceptional circumstances, the French customs administration decided to postpone the effective date of the new customs definition of the exporter to October 1, 2020.

The French customs administration alerted to the difficulties encountered in bringing logistical and commercial schemes into conformity with this new regulation within the time allowed due to the health crisis linked to “COVID 19”, therefore decided to postpone the effective date of the new customs definition of exporter to October 1, 2020 in a new note dated March 27, 2020.
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Vanessa Irigoyen

With more than 16 years of experience, Vanessa has extensive expertise in the implementation of international efficiency business models for customs, export control and indirect tax purposes. Her functions notably […]

Aymeric Lenormand

Aymeric joined Deloitte Société d’Avocats July 2018 after almost 3 years spent at EY in France. He is specialized in indirect taxes and more specifically in excise duties, customs and […]

Mélinda Coraboeuf

Melinda began my career at Deloitte in 2008. She assists French and foreign clients on day-to-day VAT issues. She developed an expertise in the VAT and RETT real estate sector. […]