Most trade in the European Union is unrestricted. However, trade between taxpayers is subject to mandatory declarations enabling the Administration to:
- Compile statistics on external trade using information communicated in the trade of goods declaration made by the trader
- Ensure compliance with tax regulations on VAT
- Combat smuggling
Trade of goods declarations (DEBs) between EU Member States enable firms to meet these requirements more easily in a single operation.
For a taxpayer liable for VAT in the Principality, entry consists of the arrival of Community goods in Franco-Monegasque territory. Goods coming from a third country outside the EU are, on the other hand, considered to have been imported.
Upon entry, you must submit a DEB if your entries during the previous calendar year:
- Amount to EUR 460,000 or more - a DEB is then required from the first month of the current calendar year
- Amount to less than EUR 460,000 euros, but you exceed this threshold during the course of the year - a DEB is then required from the month in which the threshold is exceeded
Similarly, if you have just set up your business or if it is the first time that you have traded goods with a Member State other than France, you do not need to provide a declaration of entry as long as the total of your entries does not reach the threshold of EUR 460,000. Once this figure has been exceeded, you will be subject to compulsory declaration.
For a taxpayer liable for VAT in the Principality, dispatch means sending goods from Monaco or France to a country in the European Union other than France. In this case, when goods are dispatched to a country located outside the European Union, the trader is considered to be exporting the goods.
Upon dispatch, you must submit a DEB for the first intra-Community delivery, whatever the amount involved. Upon dispatch, a DEB must be completed as from the very first Euro.
What do you need to declare?
The trade of goods declaration must cover all goods circulating between Franco-Monegasque territory and an EU Member State other than France, whether they are Community goods or third-country goods that have been the subject of customs import formalities and in particular:
- Intra-Community trade of products subject to specific regulations (excise, warfare equipment, works of art, etc.), even if such trade requires an official tracking document
- Goods that are the subject of import formalities on Franco-Monegasque territory immediately followed by a delivery or transfer to an EU Member State other than France
- Goods from a third country that are imported and cleared through customs in an EU Member State other than France (DAU), and then introduced into Franco-Monegasque territory
- Community goods dispatched from Franco-Monegasque territory to an EU Member State other than France, from whence they are exported, export formalities having been performed in that other Member State
- Community goods dispatched from an EU Member State other than France to Franco-Monegasque territory where export formalities to a third country are performed
- Goods delivered to foreign embassies and international organisations located in an EU Member State other than France
- Goods transported from Franco-Monegasque territory to a trader established in a free trade zone located in an EU Member State other than France
Subject to specific cases of invoicing related to triangular trade between Member States, a DEB is required for Community goods circulating between Franco-Monegasque territory and an EU member state other than France.
The physical flow of goods determines whether a DEB is required, and not financial flows or invoices issued.
The trade of goods declaration does not apply to:
- Trade between Member States of goods of third-country origin circulating under the external transit customs regime
- Community goods that are only passing through Franco-Monegasque territory whilst being transported
- Deliveries of supplies to French, Monegasque or Community ships or aircraft stationed on Franco-Monegasque territory (DAU)
- Deliveries of products covered by refunds to international organisations or Armed Forces established on the territory of an EU Member State other than France (DAU)
- Trade with national territories excluded from European Union customs territory or national territories included in European Union customs territory but outside the scope of the Sixth Directive
- Sales made by a Monegasque taxpayer to individuals residing in an EU Member State other than France
- Sales by correspondence for which the place of taxation is located in Monaco
- Goods intended for temporary use (if no processing or repair is envisaged or carried out and the planned duration of use does not exceed 24 months)
- Deliveries by a Monegasque taxpayer to a Monegasque embassy or consulate located in an EU Member State other than France
- Deliveries of second-hand means of transport intended for individuals or persons benefiting from a VAT exemption regime and resident in an EU Member State other than France
- Certain specific movements of goods.
Who should complete the DEB?
If you are liable for VAT in Monaco and you are involved in intra-Community trade, you must complete a trade of goods declaration.
When should you send off your DEB?
The declaration is made on a monthly basis. It is however possible to send in a declaration after each transaction.
You must send off your declaration at the latest on the 10th working day following the reference month.
The reference period is generally:
- For deliveries, the calendar month during which the VAT has become due in an EU Member state other than France for the corresponding purchase
- For purchases, the calendar month during which the VAT has become due in Monaco
VAT is payable:
- Either on the 15th of the month following the generating event
- Or upon issue of the invoice (the date of invoice is used) when it is issued before the 15th of the month following the generating event
Flows that are not included in VAT declarations in respect of deliveries/purchases (such as transactions relating to, or following repairs, for example) must be declared for the month during which they have taken place.
These rules do not apply in certain specific cases.
1/ Receipt of an invoice before the generating event triggers VAT liability
- Road transport times: invoices for the total price of the transaction generated at the time of dispatch of the goods. It is considered that invoices are issued for completed transactions
- Periodicals sold by subscription: the invoice issued at the start of the subscription period determines tax liability for all purchases of goods during the subscription period (as long as the frequency of deliveries is higher than every three months). A single DEB should then be declared at the start of the subscription
2/ Sales on consignment and transfers of stocks
- Sales on consignment: the client becomes the owner of the goods when they resell them as a purchaser
- Transfer of stock: the supplier makes available a stock of goods on the client's premises for their manufacturing process. Transfer of ownership only takes place once the goods are used and not when they are received
In both cases there may be a gap between the month during which the physical flows take place, the month for which the DEB is submitted, and the month during which VAT becomes payable.
3/ Sales on trial
Purchases and dispatches are not considered as a transfer of ownership as long as the trial is not conclusive. The DEB must be completed when transfer of ownership becomes effective.
4/ Staggered deliveries
This corresponds to dispatches or purchases over several reference periods of spare parts for a machine. The DEB relating to the total amount for the machine must be completed at the time of acceptance or of dispatch of the last spare part.
NB: DEBs submitted late and relating to periods prior to 1 January 2011 must be completed in accordance with thresholds and rules applying to them during the period to which they relate.