French Administrative Supreme Court, 4 December 2017, no. 392575

French VAT credits incurred by non resident taxable persons who are not liable for French VAT are refunded by tax authorities. Claimants based outside the EU must appoint a tax representative and submit a claim near the tax office for non resident entities by 30 June of the year following the year in which the French VAT invoiced to them became due. Those established in a Member State must submit their application through a portal made available to them by the tax authorities of their country. They do not have to appoint a tax representative and they have a deadline that expires on 30 September of the year following the year in which the tax becomes payable.

The said timeframe being defined by the European VAT rules, it was, until now, considered that companies definitively lost their right to claim VAT when they submitted their application beyond the dates indicated.

However, by a ruling dated 4 December 2017, the French Administrative Supreme Court renders this interpretation obsolete. In fact, the Court considers that France, having failed to correctly transpose the provisions of the EU regulation, was not entitled to reject claims filed after the 30 of September by a claimant established in another Member State.

The French Administrative Supreme Court notes that the deadline of 30 September exists in the texts but only for applications filed by French companies for VAT credits when they apply for the refund of their VAT credits in other member states. Consequently, the Court considers that foreign companies seeking repayment of their French VAT credit beyond 30 September cannot be denied their application for this simple reason. It is also implicitly deduced from this decision that in the absence of a specific deadline, the timeframe for applying for the refund should be similar to the one applicable to French taxpayers.

The result of this groundbreaking decision is to offer foreign businesses the possibility to once again claim VAT credits that have been rejected for non-compliance with the deadlines for submission. In this respect, the law limits to two years the period likely to be the subject of a claim.

Questions will inevitably arise for non-EU companies subject to the 30 June deadline. Similarly, the interpretation of the French Administrative Supreme Court is applicable for companies whose application had arrived on time but which had their application rejected for a first time for non-compliance with other formal requirements (eg, non-production of the required supporting documents) and who did not have time to regularize their application before the fatal deadline. Subsequently, there may be reasons for reopening old cases previously considered as permanently closed for reasons of foreclosure.