TL;DR: In France, an intra-Community acquisition is in principle subject to VAT. It may nevertheless be exempt when it concerns goods whose supply in France or importation would be exempt, or when the purchaser not established in France would be entitled to a full refund of VAT. Specific regimes also exist for investment gold, certain second-hand goods and triangular transactions.
The principle laid down by Article 262 ter-II of the CGI
Article 262 ter-II of the French General Tax Code exempts from VAT intra-Community acquisitions of goods falling into three categories:
- goods whose supply in France would be exempt;
- goods whose importation into France would be exempt pursuant to Article 291-II of the CGI;
- acquisitions for which the purchaser, not established in France and not carrying out supplies of goods or supplies of services there, would be entitled to a full refund of VAT pursuant to Article 271-V of the CGI.
The scheme also covers, when they are treated as intra-Community acquisitions by Article 256 bis-II of the CGI, the allocation or receipt of goods.
Goods whose supply in France would be exempt
The exemption applies when the goods would have benefited from an exemption if the same transaction had been carried out on the French domestic market.
You must be able to establish that the conditions for this exemption would have been met in France. This category covers goods whose supply falls under a domestic exemption regime or is treated as an exempt international exchange.
Goods whose importation would be exempt
The intra-Community acquisition is also exempt when the importation of the goods into France would have been exempt under Article 291-II of the CGI.
This notably concerns:
- currencies, banknotes and coins that are legal tender, except for collectors’ banknotes and coins;
- gold in all forms imported by issuing institutions;
- commercial seagoing vessels, certain vessels used on the high seas or for professional maritime fishing, as well as lifeboats and vessels for sea rescue and assistance;
- objects intended to be incorporated into these vessels or used for their operation at sea, as well as certain equipment and nets intended for maritime fishing;
- aircraft used by air navigation companies at least 80% of whose services are provided to or from foreign countries or overseas territories and departments, excluding metropolitan France;
- objects intended to be incorporated into these aircraft or used for their operation in flight;
- goods intended for the provisioning of the relevant vessels and aircraft, as well as warships;
- gold acquired by issuing institutions.
Acquisitions carried out by certain purchasers not established in France
Article 262 ter-II also provides for an exemption when the purchaser is not established in France, does not carry out supplies of goods or supplies of services there and would have been entitled to a full refund of the VAT due on the acquisition pursuant to Article 271-V of the CGI.
Specific regimes
Investment gold
Intra-Community acquisitions of investment gold fall under the exemption regime provided for by Article 298 sexdecies A of the CGI. To benefit from this regime, the goods must meet the tax definition of investment gold, which depends in particular on their form and degree of purity.
Second-hand goods, works of art, collectors’ items and antiques
The intra-Community acquisition of second-hand goods, works of art, collectors’ items or antiques is not subject to VAT when the seller or taxable dealer applied, in the Member State of departure, the special regime provided for by the VAT Directive, in particular the profit margin scheme.
This rule concerns goods acquired for consideration by a taxable person acting as such or by a non-taxable legal person. The treatment depends on the effective application of the special regime in the Member State of departure.
Goods intended for certain regimes
Article 277 A of the CGI also provides for the exemption of intra-Community acquisitions of goods intended to be placed under one of the regimes referred to in points 1 and 2 of that article.
Triangular transactions covered by Article 258 D
In a triangular transaction, the intra-Community acquisition is not subject to VAT when the conditions of Article 258 D of the CGI are met.
You must in particular verify that:
- the purchaser has a VAT identification number in another Member State;
- they are neither established nor identified in France and have not appointed a tax representative there under Article 289 A of the CGI;
- the acquisition is carried out for the purposes of a subsequent supply of the same goods;
- the goods are dispatched or transported directly from a Member State other than the one in which the purchaser is identified to the recipient of the subsequent supply.
The invoice issued to the recipient must be issued exclusive of tax and include the purchaser’s VAT identification number, the recipient’s French VAT identification number and the following wording: “Application of Article 141 of Council Directive 2006/112/EC of 28 November 2006”.
This transaction is classified as not subject to VAT by Article 258 D. It differs from the exemptions expressly provided for by Article 262 ter-II of the CGI.