Thanks to intensive training with LightHouse LHLF and the Federation of Independent Winemakers of PACA-Corsica, Léon the winemaker is finally ready to sell his first batch of rosé. Terms like surety bonds, Authorized Warehouse Keeper status, wine production records, and VAT no longer hold any secrets for him! It’s just in time, as Léon’s phone keeps ringing with friends eager to order some rosé for the summer.

However, selling to individuals involves numerous complexities: excise duties, accompanying documents, customs obligations, and formalities on GAMMA, GAMMA 2, DELTA, VAT rules, and more.

Luckily, his brother Xavier, a customs officer, is spending the weekend with Alice, his new tax expert girlfriend.

The first call comes from his friend Louise, who lives in Bordeaux. It’s not surprising, as she loves picnics around the Arcachon Basin and can’t do without a chilled bottle of rosé for her guests. To send rosé to Louise, Xavier and Alice reassure Léon: he will need to pay the corresponding French excise duties (€4.05 per hectoliter) and charge French VAT.

After Italy’s elimination from the Euro football tournament (Léon is delighted, still holding a grudge from the 2006 final!), his friend Giovanni returned to Rome and took the opportunity to order some rosé. For this shipment, Xavier warns Léon, as it’s a complex issue: while the bottles can be shipped with an invoice, Italian excise duties must be paid. Alice notes that the VAT regime will depend on the cumulative turnover of Léon’s sales to individuals within the EU: Léon will need to charge either French or Italian VAT, and he may have to comply with declaration obligations in Italy (Italian registration, opting for the OSS one-stop shop…).

Another friend, Franck, lives in San Francisco and misses France. Fortunately, Léon plans to send him some rosé bottles to remind him of his native Provence. For this shipment, Léon listens carefully to Xavier: he must issue an e-AD (electronic administrative document), a SAD (single administrative document), and check the clearance of the e-AD. Alice insists: Léon must keep the export proof to benefit from VAT exemption! Léon doesn’t understand all the acronyms but remembers two key points: provided the mentioned conditions are met, he does not have to pay French excise duties and can invoice without VAT.

Léon thanks Xavier and Alice. Their help is invaluable and allows him to start his business smoothly.

Soon, Léon’s rosé receives excellent reviews, and he gets calls from restaurateurs and wine shop owners wanting to place orders. Léon remembers Xavier and Alice’s warnings: customs and tax rules differ for professionals.

This warning is timely, as several of their professional friends are concerned about the regulations.

First, his friend Laura, a restaurateur, is a bit unclear. But no worries for her bistro in Lille; she can always serve her unique Welsh and rosé dish without administrative hassle. Léon reassures her: he has properly affixed CRD (representative capsules of duties) on his wine bottles, attesting to the payment of excise duties, and Laura will receive an invoice with French VAT. Even though CRDs are no longer mandatory, the invoice + CRD avoids the need for a simplified administrative document (SAD).

His cousin Marco is also concerned about his tapas restaurant in Madrid, where rosé is essential for his secret sangria recipe.

Léon recalls Xavier and Alice’s lessons and warns his cousin: excise duties of the EU country of consumption (Spain) must be paid in all cases. The wine is shipped under an e-AD (for duty-suspended movements) or an e-DAES (for movements of alcohol where French excise duties have been paid prior to dispatch to another EU country), and Léon can invoice without VAT: the exemption conditions are met! Alice adds that, besides declaring this operation in his VAT return, Léon must submit a VAT summary statement—and possibly an EMEBI response—or risk losing the exemption!

Finally, Léon hopes to make rosé the drink to surpass sake in Japan but remains unsure about the applicable regime for wine exports. Alice and Xavier quickly reassure him; he must issue an e-AD and ensure its clearance by the export declaration (which must be in EX ECS Exit mode to justify the tax-free sale). Léon can then invoice without VAT, provided he keeps proof of export!

Additionally, Alice, a bit more meticulous than Xavier (probably her tax background showing), emphasizes the need to verify before shipping rosé under duty suspension: the excise number provided by Léon’s customers must correspond to a license allowing such shipments. If the recipient is unreliable, Léon might have to pay the corresponding excise duties, preventing him from enjoying his favorite Olympic event, the hammer throw.

After a hard-working season, Léon dreams of relaxing on a beach, rosé in hand, enjoying the fruits of his labor. But before diving into the warm sand, he has one last round of administrative formalities to complete. Thankfully, his loyal advisors, Xavier the customs officer and Alice the tax expert, are there to help him cross the finish line of this administrative marathon. Last weekend was productive, and this time the discussions were more beneficial for Léon than the endless debates between Alice and Xavier on the relationship between customs value and transfer pricing!

With Xavier and Alice’s valuable advice, Léon is nearly ready to close the chapter on this administrative season. The records are up to date, the monthly and annual declarations are well underway, and Léon is about to finalize the last formalities. Soon, he can finally trade his desk for a beach chair.

One last check, and a well-deserved rest is on the horizon. Enjoy your vacation, Léon, and remember: the sand can wait, but the paperwork won’t do itself!

A series thought and written by LightHouse LHLF