Abolition of the overseas "non-collected recoverable VAT" scheme

Article 17 of the 2019 Finance Act repeals Article 295 A of the General Tax Code, which allowed businesses in Guadeloupe, Martinique and La Réunion to deduct VAT not actually paid on certain capital goods ("non-collected recoverable VAT"). The repeal applies to transactions for which VAT becomes chargeable from 1 January 2019, with a transitional period in 2019 for transactions with a deposit or delivery before 31 December 2018. The Government presented the repeal together with the reform of new-generation enterprise zones.