FREQUENTLY ASKED QUESTIONS/What are “intra-Community acquisitions” and how does this affect VAT?/

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What are “intra-Community acquisitions” and how does this affect VAT?

An intra-Community acquisition is the purchase of goods by a company subject to VAT in France from a company subject to VAT in another EU Member State.

For the purchase to be considered an intra-Community acquisition, the following conditions must be satisfied:

  • a property transfer must have taken place;
  • the merchandise must be shipped from another EU Member State to France (excluding DOM-TOMs)

French VAT will become payable once the place of delivery is in France. However, the VAT will be deductible by the payor, via the reverse charge mechanism.

Two situations should be distinguished:

  • The supply of goods: the determining criterion is territorial, only the final destination matters (the place of acquisition). If the transaction occurs in France, France is the country of taxation and therefore French VAT will be applied to the supplied goods.
  • The supply of services: the rules depend on whether or not the customer is liable for VAT. If this is the case, the place of taxation is that of the buyer. Otherwise, for B2C services, the place of taxation will be that of the service provider, the buyer being neither taxable nor liable. However, some derogations may apply. 

alf supports you in your VAT registration procedures. For more information, please visit our page dedicated to your VAT paperwork.

 

Read more:

A clear introduction to VAT

The various french VAT rates applicable to goods and services

Why resort to a tax agent?

The reverse charge mecanism

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