Scope of the tax representative’s financial liability for VAT in France: An important ruling by the Paris administrative Court
Published on :
03/06/2026
03
June
Jun
06
2026
For companies established outside the European Union that carry out taxable transactions in France for which they are liable for VAT, France requires the appointment of a tax representative established in France who, under the terms of Article 289 A of the General Tax Code (CGI), “undertakes to fulfill the formalities incumbent upon these companies and, in the case of taxable transactions, to pay the tax on their behalf ."
The tax representative therefore plays an essential role in ensuring the collection of VAT and can be considered both a compliance assistant and a guarantor of collection.
However, there is debate regarding the extent of the tax representative’s financial liability.
While Article 289 A of the CGI states that the tax representative pays only the tax potentially owed by his principal, the tax authorities appear to consider that the tax representative is also jointly and severally liable for the payment of any penalties owed by his principal, including those imposed in cases of deliberate non-compliance or fraud.
The Paris administrative Court recently issued a clear ruling on the matter. In its decision of May 19 (TA Paris, 1st Section – 2nd Chamber, May 19, 2026, No. 2407215), the Court ruled that the VAT tax representative, under the provisions of Article 289 A of the General Tax Code, is not jointly liable for the payment of penalties imposed in cases on deliberate non-compliance:
“...it follows from the provisions cited in point 7 that the tax representative established in France undertakes solely to pay the tax on behalf of the taxable person not established in France.”
Consequently, the Court exonerated the tax representative from the surcharges for deliberate non-compliance that the administration sought to impose on him.
We welcome this decision very favorably because it appears to us to be in accordance with the provisions of Article 289 A of the CGI. Furthermore, an automatic joint liability of the tax representative for penalties imposed in cases of deliberate non-compliance, in our view, constitute a no-fault liability mechanism, contrary to the principle of proportionality.
We therefore hope that this decision will help to clarify the legal framework within which tax representatives must carry out their duties.
History
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