The “répondant fiscal” is a specific kind of VAT representative, introduced by France at the request of economic operators, to circumvent the negative effects of the French reverse charge mechanism on foreign suppliers. The latter, as non-residents, are unable to charge French VAT to their customers who, on their part, are required to self-assess French VAT on their purchases. However, these providers are often in a situation of VAT credit, either because they import products sold in France or because they carry out local purchases, as they cannot offset their input VAT on the output VAT. Notwithstanding the law, the “répondant fiscal” mechanism places these suppliers in a situation to charge VAT to their customers as in a standard situation. The VAT credit then disappears at the supplier level. Meanwhile, the customer does not necessarily suffer negative consequences on his own cash position if he has a large mass of collected VAT. Condemned by the European authorities, such special tax representation stopped on 1 October 2012. On the same day, companies having adopted this route to minimise their cash flows came back to the reverse charge mechanism - and again faced VAT credits.
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The scheduled end of "répondant fiscal"
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